Current Account Deficits, External Liabilities and Economic Policy

July 1, 1992

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J. D. Pitchford Current Account Deficits, External Liabilities and Economic Policy, (USA: International Monetary Fund, 1992) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper assesses the policy significance of foreign liabilities and the current account deficits that give rise to them. Current account imbalances are shown to have some capacity to indicate difficulties elsewhere in the economy, but are imperfect indicators and subject to potential misinterpretation. The paper concludes that successful pursuit of internal balance could be an important factor in stabilizing current account balances, but, beyond that, there seems no good reason for using macroeconomic policy to target the current account as such. However, there may be grounds for microeconomic action to remedy specifically identified problems.

Subject: Balance of payments, Current account, Current account balance, Current account deficits, External debt, Government debt management, Public financial management (PFM)

Keywords: Circumstances current account deficit, Current account, Current account balance, Current account deficit rise, Current account deficits, Current account effect, Current account issue, Current account outcome, Current account target, Debt, Deficit, Deficit country, Economic system, Europe, Firm, Government debt management, Inflation rate, Nominal exchange rate, Nominal rate, Private sector investment, WP

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/054
Stock No:

WPIEA0541992
ISBN:

9781451847437
ISSN:

1018-5941

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