This paper examines the statistical nature of the persistency of current account balances and its determinants. With the assumption that stationary current account series ensures the long-run budget constraint while countries may experience "local non-stationarity" in current account balances,...

Sudden stops in capital inflows were a main characteristic of the emerging market crisis during the 1990's. Concerns about them have recurred in the light of recently increased global stability risk and the quantitative easing that led to substantial capital inflows in emerging economies. We add...

We develop a three-country, stock-flow consistent macroeconomic model to study the effects of changes in both personal and functional income distribution on national current account balances. Each country has a household sector and a non-household (corporate) sector. The household sector is...

Global current account imbalances are one of the key macroeconomic imbalances that underlie the global financial crisis. The central objective of this paper is to analyze the causes and consequences of global imbalances from the perspective of developing Asia. More specifically, we examine the...

During the 2011-2015 period, Turkey's current account deficit as a percentage of GDP was one of the largest among the OECD countries. In this paper, we examine if this deficit can be considered sustainable using the Engel and Rogers (2006) approach. In this framework, the current account of a...

This paper studies how removing barriers to competition in the nontraded goods sector affects the current account, the real exchange rate, and factor prices in a small open economy. We show that the expansion of the nontraded sector that results from a deregulation shock is associated with an...

Both theoretical and operational definitions of current account sustainability show a persistent and fragile current account balance (deficit) for Ghana. This has created a financing gap in the Ghanaian economy, typically filled by capital inflows, in particular aid. Even as Ghana depends to a...

International financial integration has greatly increased the scope for changes in a country's net foreign asset position through the valuation channel of external adjustment, namely capital gains and losses on the country's external assets and liabilities. We examine this valuation channel...

We investigate the role of budget balances, financial development and openness, in the evolution of global imbalances. Financial development or the lack thereof has received considerable attention as a possible contributing factor to the development of persistent and expanding current account...

Limited empirical work has been done to the diverging current account balances of the individual emerging Asian economies. Based on the intertemporal approach to current account, this paper empirically examines both the long-run and short-run impacts of initial stock of net foreign assets,...