Patterns of Current Account Adjustment – Insights from Past Experience

Bernardina Algieri and Thierry Bracke

No 2029, CESifo Working Paper Series from CESifo

Abstract: The paper examines episodes of current account adjustment in individual economies. A central finding is that these episodes are very divergent and can be usefully classified, on the basis of cluster analysis, in three groups. A majority of cases is characterised by internal adjustment, exhibiting slowing domestic demand growth. In some cases, the adjustment was mainly external, facilitated by an exchange rate depreciation but without economic slowdown. Finally, some cases involved a crisis-like combination of a severe slowdown and a significant currency depreciation. Using a multinomial logit, we find that this classification of episodes helps improve the predictability of current account adjustment.

Keywords: external imbalances; current account adjustment; cluster analysis; multinomial logit (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp2029.pdf (application/pdf)

Related works:
Journal Article: Patterns of Current Account Adjustment—Insights from Past Experience (2011)
Working Paper: Patterns of current account adjustment: insights from past experience (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2029

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().