This paper examines the persistent deterioration in the international external position of the U.S. over the past 60 years. I develop a model without Ponzi schemes and arbitrage opportunities that accounts for both the secular rise and the cyclical variations in the U.S. international debt...

In this chapter we provide a brief review of the “signals” approach used in this book to assess the probability of a currency or a banking crisis. This methodology was first used to analyze the performance of a variety of macroeconomic and financial indicators around the “twin crises” in...

The signals approach was applied to 24 of the indicators around the dates of the 29 banking and the 87 currency crises. In what follows, we first compare our results for the 15 original indicators in Kaminsky and Reinhart (1996) to those presented in that study. This exercise assesses the...

In this study, we begin by assessing the ability of sovereign credit ratings to anticipate crises. In addition, given the wave of sovereign credit ratings downgrades that have followed the crises in Asia, we investigate formally the extent to which credit ratings are reactive. Along the way, we...

This paper examines the degree of capital mobility in the countries of the Caucasus. We employ a simple model developed in the seminal paper by Feldstein and Horioka (1980). First, we estimate the model using conventional time-series econometrics in order to capture the short-run dynamics. Then,...

This paper investigates macroeconomic determinants of the current account balance in Namibia. The results show that there is evidence of twin deficit hypothesis in Namibia. Evidence of twin deficit hypothesis suggest that it is important for Namibia to have fiscal discipline in order to improve...

Understanding the impact of financial variables on the current account balance is one of the priorities of academic literature and policy makers. Evidence from a broad panel of countries shows that an increase in the credit growth causes a significant deterioration in the current account...

The effects of capital controls on international trade have not been thoroughly examined empirically. Using highly disaggregated bilateral industry-level export data across a large number of countries, this paper evaluates how restrictions on cross-border capital flows affect export. We identify...

The effects of capital controls on international trade have not been thoroughly examined empirically. Using highly disaggregated bilateral industry-level export data across a large number of countries, this paper evaluates how restrictions on cross-border capital flows affect export. We identify...

Balance of Payments (BoP), being a record of the monetary transactions over a period with the rest of the world, reflects all payments and liabilities to foreigners and all payments and obligations received from foreigners. In this sense, the balance of payments is one of the major indicators of...