Capital flows and the current account: Taking financing (more) seriously

Claudio Borio and Piti Disyatat

No 525, BIS Working Papers from Bank for International Settlements

Abstract: This paper questions the appropriateness of popular analytical frameworks that focus on current accounts or net capital flows as a basis for assessing the pattern of cross-border capital flows, the degree of financial integration and the vulnerability of countries to financial crises. In the process, it revisits the Lucas paradox, the Feldstein-Horioka puzzle and the notion of sudden stops. It argues that, in a world of huge and free capital flows, the centrality of current accounts in international finance, and hence in academic and policy debates, should be reconsidered.

Keywords: capital flows; current account; global imbalances; financial integration; credit; finance; money (search for similar items in EconPapers)
Pages: 50 pages
Date: 2015-10
New Economics Papers: this item is included in nep-acc, nep-ifn and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (101)

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Related works:
Working Paper: Capital Flows and the Current Account: Taking Financing (More) Seriously (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:525

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