IMF Views on the Role of Incomes Policies in the External Adjustment Strategies of Developing Countries

E. Walter Robichek

Chapter 6 in Incomes Policies, 1989, pp 102-108 from Palgrave Macmillan

Abstract: Abstract What is referred to as ‘balance of payments adjustment’ or ‘adjustment’ for short, is the process of restoring a sustainable relationship between aggregate domestic income and aggregate domestic expenditure, a relationship mirrored in the current account of the balance of payments. Developing countries used to be classified as structural capital importers, meaning that they were expected to run current account deficits. The constraints on these deficits were, and still are, the size of the country’s accumulated international reserves and its access to foreign capital from private, as well as from public, sources. The latter depends heavily on perceptions at home and abroad of the quality of the country’s economic management; and therein lies a certain contradiction.

Keywords: Foreign Capital; Current Account Deficit; International Reserve; Domestic Credit; Income Policy (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-20381-9_6

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DOI: 10.1007/978-1-349-20381-9_6

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