The Current Account in Perspective: Lessons from the Italian Experience

International Monetary Fund

No 1990/037, IMF Working Papers from International Monetary Fund

Abstract: This paper draws some lessons about policies toward the current account from Italy’s balance of payments history between 1960 and 1988. The key role of speculative capital flows during every major episode of external imbalance brings out the limitations of exchange rate rules that focus exclusively on the current account. Simple saving-investment rules would also have failed to avert Italy’s balance of payments crises. These arose in the context of widening current deficits due to a rising investment ratio and/or a widening private imbalance, which should have been self-correcting according to the commonly proposed saving-investment rules.

Keywords: WP; deficit; saving; saving-investment approach; saving-investment framework; persistent current account deficit; saving-investment correlation; approach to the current account; investment balance; widening deficit; balance of payments crisis; capital account deficit; government saving; private sector investment; Italy's current account; Current account; Current account deficits; Capital account; Capital flows; International reserves (search for similar items in EconPapers)
Pages: 38
Date: 1990-01-01
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=27521 (application/pdf)

Related works:
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:imf:imfwpa:1990/037

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().