In the aftermath of the Asian financial crisis of 1997–99, central banks and governments throughout the developing world have accumulated foreign exchange reserves and other official assets at an unprecedented rate. This paper shows that this official asset accumulation has driven a...

This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the...

In his latest Policy Brief, Daniel Gros gives a new angle on why the existence of current account ‘imbalances' should provoke the greatest financial crisis in living history if the raison d'être of a financial system is to deal with imbalances (between savers and investors). He argues that...

China in the past few years has emerged as a net foreign creditor on the international scene with net foreign assets slightly greater than zero percent of wealth. This is surprising given that China is a relatively poor country with a capital-labor ratio about one-fifth the world average and...

The global financial markets have the most vulnerable economic backgrounds ever. Thus, small shocks in the financial markets can trigger an enormous crisis in 2008, or even to a larger extent. External adjustments on foreign assets and liabilities will play an important role in international...

The composition of Japan's current account balance has changed over time, with an increasing income balance primarily reflecting a growing net foreign asset position and higher corporate saving. A comparison of Japan's income balance with peer countries highlights: (i) relatively high yields on...

We investigate the medium-term determinants of the current account using a model that controls for factors related to institutional development, with a goal of informing the recent debate over the existence and relevance of the "savings glut." The economic environmental factors that we consider...