 Current Account Imbalances: Can Structural Policies Make a Difference?Anna Ivanova No 2012/061, IMF Working Papers from International Monetary Fund Abstract: The discussion of global and regional imbalances has put the spotlight on the possible link between current accounts and structural policies. Drawing on standard empirical current account models, the paper finds that the commonly recommended structural factors cannot explain the widening of imbalances prior to the 2008 - 09 crisis. That said, structural factors do help explain some part of long-standing cross-country differences in the current account levels. In particular, countries with stricter credit market regulation, higher taxes on businesses, lower minimum wage (in particular,in slow growing economies) and generous unemployment benefits tend to have higher current account balances than others. Keywords: WP; protection index; credit market; current account surplus; OECD country; Current account; structural policies; imbalances; employment protection index; replacement ratio; OECD sample; current account reduction; current account to GDP; credit market regulation index; current account regression; product market regulation; OECD employment protection index; Current account balance; Employment protection; Current account surpluses; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2012/061 Ordering information: This working paper can be ordered from 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. |
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