scholarly journals An Anatomy of the Spanish Current Account Adjustment: The Role of Permanent and Transitory Factors

2017 ◽  
Author(s):  
Enrique Moral-Benito ◽  
Francesca Viani
Keyword(s):  
Current Account ◽  
Current Account Adjustment

scholarly journals An anatomy of the Spanish current account adjustment: the role of permanent and transitory factors

SERIEs ◽  
2020 ◽  
Vol 11 (4) ◽  
pp. 501-529
Author(s):  
Mar Delgado-Téllez ◽  
Enrique Moral-Benito ◽  
Francesca Viani
Keyword(s):  
Current Account ◽  
Global Financial Crisis ◽  
Recovery Period ◽  
Balance Assessment ◽  
Lower Growth ◽  
External Balance ◽  
The Global Financial Crisis ◽  
Current Account Adjustment ◽  
Country Specific

AbstractThis paper investigates how much of the current account adjustment after the global financial crisis in Spain can be explained by cyclical factors. For this purpose, we extend the IMF’s external balance assessment methodology to allow for country-specific slopes and intercepts. The good fit of these cross-country regressions implies negligible residuals for most countries, and, as a result, the positive analysis of current account decompositions provides a more informative assessment of the external balance drivers. According to our findings, around 60% of the 11 pp. adjustment of the Spanish external imbalance over the years 2008–2015 can be explained by transitory factors such as the output gap, the oil balance, and the financial cycle—a share that diminished down to 50% during the more recent recovery period. The remaining adjustment of the Spanish external balance is explained by factors such as the cyclically adjusted fiscal consolidation, population ageing, lower growth expectations, or competitiveness gains, which can all be considered as more permanent phenomena.

scholarly journals The role of exchange rate for current account: A panel data analysis

EconomiA ◽  
2020 ◽  
Vol 21 (1) ◽  
pp. 57-72
Author(s):  
Flávio Vilela Vieira ◽  
Ronald MacDonald
Keyword(s):  
Exchange Rate ◽  
Data Analysis ◽  
Panel Data ◽  
Current Account ◽  
Panel Data Analysis

scholarly journals Inflation targeting, disinflation, and debt traps in Argentina

2020 ◽  
Vol 17 (1) ◽  
pp. 78-105
Author(s):  
Emiliano Libman ◽  
Gabriel Palazzo
Keyword(s):  
Foreign Exchange ◽  
Current Account ◽  
Risk Premium ◽  
Inflation Targeting ◽  
Inflation Rate ◽  
Current Account Deficit ◽  
External Debt ◽  
Stabilization Process ◽  
Eventual Collapse

This paper highlights the role of external indebtedness and the presence of inflationary inertia in order to assess the effectiveness and sustainability of inflation targeting during disinflation episodes. As the recent Argentinian experience illustrates, a sluggish inflation rate and a significant current-account deficit may make the stabilization process difficult. To illustrate the point, we build a model that shows that, when inflation adjusts fast, the target may be achieved without building too much external debt. But if inflation adjusts slowly, an excessive build-up of external debt could lead to an increase in the risk premium, a sudden shortage of foreign exchange, and the eventual collapse of the inflation-targeting regime.

Current Account Dynamics: The Role of Real Shocks

1989 ◽  
Vol 89 (80) ◽  
pp. i
Author(s):  
International Monetary Fund
Keyword(s):  
Current Account ◽  
Current Account Dynamics ◽  
Real Shocks
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