Medium-Term Determinants of Current Accounts in Industrial and Developing Countries: An Empirical Exploration

Menzie Chinn and Eswar Prasad

No 2000/046, IMF Working Papers from International Monetary Fund

Abstract: This paper provides an empirical investigation of the medium-term determinants of current accounts for a large sample of industrial and developing countries. The analysis is based on a structural approach that highlights the roles of the fundamental macroeconomic determinants of saving and investment. Cross-section and panel regression techniques are used to characterize the properties of current account variation across countries and over time. Current account balances are positively correlated with government budget balances and initial stocks of net foreign assets. Among developing countries, measures of financial deepening are positively correlated while indicators of openness to international trade are negatively correlated with current account balances.

Keywords: WP; developing country; GDP; GDP ratio; result; Current account variation; structural and macroeconomic determinants; saving-investment balance; current account position; current account determination; budget balance; current account sustainability; current account dynamics; developing country sample; Current account; Current account balance; Current account deficits; Personal income; Terms of trade; Africa (search for similar items in EconPapers)
Pages: 39
Date: 2000-02-01
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Citations: View citations in EconPapers (69)

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Related works:
Journal Article: Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration (2003)
Working Paper: Medium-Term Determinants of Current Accounts in Industrial and Developing Countries: An Empirical Exploration (2000)
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