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

Menzie Chinn and Eswar Prasad

No 7581, NBER Working Papers from National Bureau of Economic Research, Inc

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. We find that 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 associated with current account balances while indicators of openness to international trade are negatively correlated with current account balances.

JEL-codes: F32 F41 (search for similar items in EconPapers)
Date: 2000-03
New Economics Papers: this item is included in nep-his
Note: IFM
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Published as Chinn, Menzie D. and Eswar S. Prasad. "Medium-term Determinants Of Current Accounts In Industrial And Developing Countries: An Empirical Exploration," Journal of International Economics, 2003, v59(1,Jan), 47-76.

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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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