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Current Account Deficits, External Liabilities and Economic Policy
Author:
Mr. J. D. Pitchford null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1992: Issue 054
Language:
English
Publication Date:
01 Jul 1992
DOI:
https://doi.org/10.5089/9781451847437.001
ISBN:
9781451847437
ISSN:
1018-5941
Pages:
52
Keywords:
WP; deficit; debt; firm; current account outcome; economic system; nominal rate; inflation rate; private sector investment; current account deficit rise; current account target; deficit country; circumstances current account deficit; nominal exchange rate; current account issue; current account effect; Current account deficits; Current account; Current account balance; Government debt management; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund