Publication: Toolkit for the Analysis of Current Account Imbalances
Date
2013-11
ISSN
Published
2013-11
Author(s)
Abstract
The fluctuating economies and differing
experiences of countries before and after the economic
crisis of 2008 indicate a complex network of possible
influences. Persistent current account deficits and exchange
rate misalignments frequently presage disruptive economic
trends. The result can be external crises, exchange rate
collapses, vulnerability to sudden stops, current account
reversals, and economic slowdowns. When a growing number of
countries run external deficits, investigation of the causes
is warranted. It is crucial to understand the drivers of
persistent current account deficits; the relative importance
of cyclical and structural factors; conditions that imply
external sustainability; sources of sustainable financing
for the deficit; and steps governments can take to narrow
the imbalance. This toolkit presents a framework that can be
used to assess a country's external situation through
the lens of the current and financial accounts. The
framework is divided into three components: current account
outcome analysis, current account diagnostics, and economic policy.
Citation
“Cusolito, Ana Paula; Nedeljkovic, Milan. 2013. Toolkit for the Analysis of Current Account Imbalances. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/17005 License: CC BY 3.0 IGO.”