Feasible Limits For External Deficits And Debt
Anthony Makin
No 321, Discussion Papers Series from University of Queensland, School of Economics
Abstract:
Rising current account deficits and foreign debt levels remain a source of concern for international financial markets and policymakers. Yet, exactly what constitutes an "excessive" external deficit or liability position for an economy at any time has not been adequately defined. This paper addresses this question by proposing measures of the maximum feasible limits of current account deficits and foreign debt levels based on international macroeconomic relationships. It proposes that investment opportunities essentially define the limit of feasibility for current account deficits, whereas the capital to output ratio sets the feasible foreign debt to GDP limit. Benchmark estimates of these limits are presented for advanced economies that have borrowed heavily since 1990.
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://economics.uq.edu.au//files/44332/321.pdf (application/pdf)
Related works:
Journal Article: Feasible Limits for External Deficits and Debt (2005) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:321
Access Statistics for this paper
More papers in Discussion Papers Series from University of Queensland, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by SOE IT ().