Current Account Reversals: Always a Problem?

Barry Eichengreen and Muge Adalet

No 11634, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using panel data and case studies, we analyze the pre-1970 history of international capital flows and current account reversals. Considering a sample of emerging markets and advanced economies with per capita GDPs at least 60 per cent those of the lead country, we show that the incidence of reversals has been unusually great in recent years. The only prior period that matched the last three decades in terms of the frequency and magnitude of reversals was the 1920s and 1930s, decades notorious for the instability of capital flows. In contrast, reversals were both less common and smaller in the Bretton Woods and pre-World War I gold standard eras.

JEL-codes: F31 F33 N15 N65 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-his
Note: DAE IFM ME
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Published as Current Account Reversals: Always a Problem? , Muge Adalet, Barry Eichengreen. in G7 Current Account Imbalances: Sustainability and Adjustment , Clarida. 2007

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