Current account balances in Central America 1974–1984: external and domestic influences

1987 ◽  
Vol 19 (1) ◽  
pp. 87-111 ◽  
Author(s):  
William Loehr
Keyword(s):  
Exchange Rates ◽  
Interest Rates ◽  
Current Account ◽  
Real Exchange Rates ◽  
Developed Countries ◽  
Central American ◽  
Budget Deficits ◽  
External Variables ◽  
The Developed Countries ◽  
Current Account Balances

SummaryThis paper examines the sensitivity of current account balances to several important variables. Variables are classified as external and domestic. External variables are those over which Central American countries have little or no control. In this study external variables are real interest rates in world capital markets, the terms of trade, and growth in the developed countries. Low real interest rates, improved terms of trade and rapid growth in the developed countries would be expected to improve current account balances. Domestic variables include budget deficits and real exchange rates. These are factors over which Central American countries do have control. Budget deficits and appreciations of real exchange rates can be expected to cause deteriorations in current account balances.

2014 Pilot External Sector Report - Individual Economy Assessments

Policy Papers ◽  
2014 ◽  
Vol 2014 (34) ◽  
Author(s):  
Keyword(s):  
Exchange Rates ◽  
Current Account ◽  
Real Exchange Rates ◽  
International Reserves ◽  
Balance Assessment ◽  
Assessment Approach ◽  
External Sector ◽  
Individual Economy ◽  
Current Account Balances

The external sector assessments use a range of methods and metrics, including the External Balance Assessment approach developed by the IMF’s Research Department to estimate desirable levels of current account balances and real exchange rates (Box 3 of the 2014 Pilot External Sector Report discusses the use of this methodology). The overall assessments of external positions are based on the judgment of IMF staff drawing on the inputs provided by these model estimates and other analysis, including assessment of international reserves holdings, while taking account of relevant uncertainties. The assessments, which are multilaterally consistent, highlight the role of policies in shaping external positions.

scholarly journals European Monetary Union: a cointegration analysis

2021 ◽  
Author(s):  
Alfred A Haug ◽  
Leo Michelis
Keyword(s):  
European Union ◽  
Exchange Rates ◽  
Interest Rates ◽  
Monetary Union ◽  
Real Exchange Rates ◽  
Cointegration Analysis ◽  
Budget Deficits ◽  
The European Union ◽  
Convergence Criteria ◽  
European Union Countries

This paper employs systems-based cointegration techniques developed by [Reference to Johansen] and [Reference to Johansen] to determine which European Union countries would form a successful Economic and Monetary Union (EMU), based on long-run behavior of the nominal convergence criteria laid down in the Maastricht treaty. The original 12 European Union countries are analyzed together. Nominal exchange rates, real exchange rates, long-term interest rates, and government budget deficits are each analyzed for co-movements among the 12 countries and various subgroups of them. The results suggest that not all of the 12 original countries of the European Union can form a successful EMU over time, unless several countries make significant adjustments.

scholarly journals European Monetary Union: a cointegration analysis

2021 ◽  
Author(s):  
Alfred A Haug ◽  
Leo Michelis
Keyword(s):  
European Union ◽  
Exchange Rates ◽  
Interest Rates ◽  
Monetary Union ◽  
Real Exchange Rates ◽  
Cointegration Analysis ◽  
Budget Deficits ◽  
The European Union ◽  
Convergence Criteria ◽  
European Union Countries

This paper employs systems-based cointegration techniques developed by [Reference to Johansen] and [Reference to Johansen] to determine which European Union countries would form a successful Economic and Monetary Union (EMU), based on long-run behavior of the nominal convergence criteria laid down in the Maastricht treaty. The original 12 European Union countries are analyzed together. Nominal exchange rates, real exchange rates, long-term interest rates, and government budget deficits are each analyzed for co-movements among the 12 countries and various subgroups of them. The results suggest that not all of the 12 original countries of the European Union can form a successful EMU over time, unless several countries make significant adjustments.

Budget Deficits and Current Account Balances

2013 ◽  
Author(s):  
Ahmad Zubaidi Baharumshah ◽  
Siew-Voon Soon ◽  
Hamizun Ismail
Keyword(s):  
Current Account ◽  
Budget Deficits ◽  
Current Account Balances

Financial Liberalization, Crises, and Economic Growth

2008 ◽  
Vol 7 (1) ◽  
pp. 106-115
Author(s):  
Inkoo Lee ◽  
Jong-Hyup Shin
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Financial Liberalization ◽  
Probit Model ◽  
Developed Countries ◽  
Sample Group ◽  
Panel Model ◽  
Catching Up ◽  
Nominal Interest Rates ◽  
The Developed Countries

The paper computes the effect of financial liberalization on economic growth by combining the results of a panel model with those of a probit model. It finds a positive net effect from financial liberalization to growth. Surprisingly, we find that the net effect on growth is larger in the crisis-experienced country group than in the overall sample group. Our guess is that the crisis-experienced countries are mostly developing countries that usually enjoy higher growth rates than the developed countries because of the catching-up phenomenon. The paper also studies the link between financial liberalization and nominal interest rates, and finds, contrary to expectations, that the direct liberalization effect is positive. Our guess is that this reflected the overshooting of interest rates after crises.

scholarly journals The Present Global Crisis and Its Effect on the Turkish Economy

2010 ◽  
Author(s):  
Özlen Hiç
Keyword(s):  
Developing Countries ◽  
Interest Rates ◽  
Economic Crisis ◽  
Developed Countries ◽  
Local Elections ◽  
Parliamentary Elections ◽  
Turkish Economy ◽  
The Usa ◽  
The Government ◽  
The Developed Countries

The global economic crisis first started in the USA in September 2008 as a widespread insolvency problem caused by mortgage debts of households that had become unpayable. The financial crisis, in turn, caused a serious recession. The economic crisis soon spread to other developed countries because their banks held assets of US banks that had become nearly worthless while exports of these countries to the USA decreased significantly. Then it spread to developing countries because direct private investments (DPIs) and financial funds flowing from developed to developing countries declined precipitously while exports of the latter to the former countries also fell down. The developed countries, however, took proper steps to ameliorate the crisis by lowering the interest rates, helping the insolvent banks financially as wel as launching public expenditure programmes. Turkey was one of the worst hit countries because she had been following wrong globalization strategies. Privatization process was corrupt while much of the DPIs went to those fields which did not yield much increase in employment or export potential. But most importantly, Turkey had raised interest rates to abnormally high levels and thereby had vastly expanded her internal and external debts. Hence, as a result of the global economic crises, Turkey suffered a significantly deep fall in her GNP growth rate and a very big increase in her unemployment rate. Though Turkey took several measures to ameliorate the balance of payments deficit and to expand total demand, hence production, the government refrained from making a stand-by agreement with the IMF in order to avoid strict discipline in her government expenditures due to first, local elections and presently, the coming parliamentary elections.

scholarly journals Current Account Fragilities in the Balkan Countries

2014 ◽  
Author(s):  
Ercan Uygur
Keyword(s):  
Exchange Rates ◽  
Current Account ◽  
Trade Balance ◽  
Current Account Deficit ◽  
Real Exchange Rates ◽  
Foreign Debt ◽  
Debt Ratio ◽  
Current Account Deficits ◽  
Balkan Countries ◽  
The Current Account

The basic aim of this paper is to make an evaluation of the current account deficits in the Balkan countries. Particularly, sustainability of these deficits is explored for some countries on the basis of a criterion that makes use of variables including foreign debt ratio, growth rate, exchange rate, foreign interest rate and foreign trade balance ratio. Countries with significant current account deficit/GDP ratios include, in descending order, Albania, Bosnia Herzegovina, Turkey, Serbia and Macedonia. Sources of financing of the current account deficits, real exchange rates and inflation are other variables that are considered in the evaluations.

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