Current Account Sustainability: Selected East Asian and Latin American Experiences

Assaf Razin and Gian Maria Milesi-Ferretti ()

No 1996/110, IMF Working Papers from International Monetary Fund

Abstract: A number of developing countries have run large and persistent current account deficits in both the late seventies/early eighties and in the early nineties, raising the issue of whether these persistent imbalances are sustainable. This paper puts forward a notion of current account sustainability and compares the experience of three Latin American countries-Chile, Colombia Mexico-and three East Asian countries-Korea, Malaysia and Thailand. It identifies a number of potential sustainability indicators and discusses their usefulness in predicting external crises.

Keywords: WP; exchange rate; foreign direct investment; terms of trade; short-term debt; external shock; representative firm; debt neutrality result; investment decision; world debt table; debtor country; borrowing firm; debt flow; present discounted value; decision of a representative firm; Current account deficits; Current account imbalances; Current account; Real exchange rates; East Asia (search for similar items in EconPapers)
Pages: 50
Date: 1996-10-01
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Citations: View citations in EconPapers (69)

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Working Paper: Current Account Sustainability: Selected East Asian and Latin American Experiences (1996)
Working Paper: Current Account Sustainability: Selected East Asian and Latin American Experiences (1996)
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