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Author | : Ms. Christina Kolerus |
Publisher | : International Monetary Fund |
Total Pages | : 38 |
Release | : 2021-07-30 |
Genre | : Business & Economics |
ISBN | : 1513584707 |
Download What Shapes Current Account Adjustment During Recessions? Book in PDF, ePub and Kindle
This paper studies the dynamics of external accounts during 278 economic recession events in the past 60 years and sheds light on key factors that shape these patterns. Economic recessions trigger highly-persistent increases in the current account, driven by an initial, sharp decline in investment and fueled by medium term deleveraging, more so in advanced economies than in emerging markets. The strengthening of the current account is more pronounced when internal and external imbalances are present, and less when recessions are synchronized across countries. During severe natural disasters or epidemics, however, current accounts tend to weaken in the short term. Consistent with these findings, the COVID-19 shock, with comparatively moderate pre-existing imbalances yet high synchronization, had a muted effect on current account balances. The compositional changes, however, were unique and driven by unprecedented policy intervention, with record public dissaving more than offsetting exceptional private saving.
Author | : Mr.Ayhan Kose |
Publisher | : International Monetary Fund |
Total Pages | : 77 |
Release | : 2008-12-01 |
Genre | : Business & Economics |
ISBN | : 1451871325 |
Download What Happens During Recessions, Crunches and Busts? Book in PDF, ePub and Kindle
We provide a comprehensive empirical characterization of the linkages between key macroeconomic and financial variables around business and financial cycles for 21 OECD countries over the period 1960–2007. In particular, we analyze the implications of 122 recessions, 112 (28) credit contraction (crunch) episodes, 114 (28) episodes of house price declines (busts), 234 (58) episodes of equity price declines (busts) and their various overlaps in these countries over the sample period. Our results indicate that interactions between macroeconomic and financial variables can play major roles in determining the severity and duration of recessions. Specifically, we find evidence that recessions associated with credit crunches and house price busts tend to be deeper and longer than other recessions. JEL Classification Numbers: E32; E44; E51; F42
Author | : Mr.Stijn Claessens |
Publisher | : International Monetary Fund |
Total Pages | : 66 |
Release | : 2013-01-30 |
Genre | : Business & Economics |
ISBN | : 1475561008 |
Download Financial Crises Explanations, Types, and Implications Book in PDF, ePub and Kindle
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Author | : Mr. Alberto Behar |
Publisher | : International Monetary Fund |
Total Pages | : 46 |
Release | : 2022-05-27 |
Genre | : Business & Economics |
ISBN | : |
Download The Current Account Income Balance: External Adjustment Channel Or Vulnerability Amplifier? Book in PDF, ePub and Kindle
In terms of size, the net income balance (IB) is comparable to the trade balance (TB) for many countries. Yet the role of the IB in mitigating external vulnerabilities or complicating external adjustment remains underexplored. This paper studies the role of the IB in stabilizing or destabilizing the current account over the cycle and in crises. Our results show that, due to a negative correlation with the TB, the IB significantly dampens the time series volatility of the current account for most countries. However, the IB generally does not improve during crisis episodes, so current account adjustment occurs entirely through improvements in the TB. The paper also estimates IB semi-elasticities with respect to the exchange rate (ER). Semi-elasticities are small for most countries, so the IB is generally not a significant channel through which the ER stabilizes the current account, and trade-based semi-elasticities are, with some important exceptions, good proxies for current account semi-elasticities used in external sector assessments.
Author | : Board of Governors of the Federal Reserve System |
Publisher | : |
Total Pages | : 0 |
Release | : 2002 |
Genre | : Banks and Banking |
ISBN | : 9780894991967 |
Download The Federal Reserve System Purposes and Functions Book in PDF, ePub and Kindle
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author | : Maurice Obstfeld |
Publisher | : |
Total Pages | : 64 |
Release | : 2004 |
Genre | : Balance of trade |
ISBN | : |
Download External Adjustment Book in PDF, ePub and Kindle
"Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website
Author | : |
Publisher | : |
Total Pages | : 32 |
Release | : 1984 |
Genre | : Dollar, American |
ISBN | : |
Download Foreign Exchange Value of the Dollar Book in PDF, ePub and Kindle
Author | : Jane Dokko |
Publisher | : |
Total Pages | : 76 |
Release | : 2009 |
Genre | : Monetary policy |
ISBN | : |
Download Monetary Policy and the Housing Bubble Book in PDF, ePub and Kindle
Author | : M. Ayhan Kose |
Publisher | : World Bank Publications |
Total Pages | : 403 |
Release | : 2021-03-03 |
Genre | : Business & Economics |
ISBN | : 1464815453 |
Download Global Waves of Debt Book in PDF, ePub and Kindle
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author | : International Monetary Fund. Research Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 252 |
Release | : 2009-04-22 |
Genre | : Business & Economics |
ISBN | : 1589068068 |
Download World Economic Outlook, April 2009 Book in PDF, ePub and Kindle
This edition of the World Economic Outlook explores how a dramatic escalation of the financial crisis in September 2008 provoked an unprecedented contraction of activity and trade, despite active policy responses. It presents economic projections for 2009 and 2010, and also looks beyond the current crisis, considering factors that will shape the landscape of the global economy over the medium term, as businesses and households seek to repair the damage. The analysis also outlines the difficult policy challenges presented by the overwhelming imperative to take all steps necessary to restore financial stability and revive the global economy, and the longer-run need for national actions to be mutually supporting. The first of two analytical chapters, "What Kind of Economic Recovery?" explores the shape of the eventual recovery. The second, "The Transmission of Financial Stress from Advanced to Emerging and Developing Economies," focuses on the role of external financial linkages and financial stress in transmitting economic shocks.