TY - JOUR
T1 - Persistent current account deficits
T2 - A warning signal?
AU - Milesi-Ferretti, Gian Maria
AU - Razin, Assaf
PY - 1996
Y1 - 1996
N2 - When should persistent current account deficits be of concern to policymakers? We address this question by developing a framework for analysing current account sustainability, that explicitly takes into account willingness to pay and willingness to lend in addition to intertemporal solvency. This framework helps understand a variety of country experiences with protracted current account imbalances. We identify a number of sustainability indicators related to the structure of the economy, the economic policy stance, and political economy factors, and use them to evaluate the experience of countries that suffered external crises and of others that avoided them.
AB - When should persistent current account deficits be of concern to policymakers? We address this question by developing a framework for analysing current account sustainability, that explicitly takes into account willingness to pay and willingness to lend in addition to intertemporal solvency. This framework helps understand a variety of country experiences with protracted current account imbalances. We identify a number of sustainability indicators related to the structure of the economy, the economic policy stance, and political economy factors, and use them to evaluate the experience of countries that suffered external crises and of others that avoided them.
KW - Current account
KW - Openness
KW - Solvency
KW - Sustainability
UR - http://www.scopus.com/inward/record.url?scp=0010734372&partnerID=8YFLogxK
U2 - 10.1002/(SICI)1099-1158(199607)1:3<161::AID-IJFE19>3.0.CO;2-W
DO - 10.1002/(SICI)1099-1158(199607)1:3<161::AID-IJFE19>3.0.CO;2-W
M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???
AN - SCOPUS:0010734372
SN - 1076-9307
VL - 1
SP - 161
EP - 181
JO - International Journal of Finance and Economics
JF - International Journal of Finance and Economics
IS - 3
ER -