We model capital flows among Chinese provinces using a theory-based variance decomposition that allows us to gauge the importance of various channels of external adjustments at the regional level: variation in intertemporal prices—domestic and international interest rates and the real exchange...

Sudden stops in capital flows are a form of financial whiplash that creates instability and crises in the affected economies. Sudden stops in net capital flows trigger current account reversals as countries that were borrowing on net from the rest of the world before the stop can no longer...

This paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals. The findings are that deficits are (i) not very persistent; (ii) positively linked with domestic growth; (iii) strongly linked with public (and...

Long- and short-run current account balance (CAB) determinants of the nineteen Eurozone (EZ) member states vis-a-vis the United States (US) are examined. Particularly, the competitiveness of the EZ vs the US, the relationship between the current account deficit and the budget deficit (twin...

If sectoral trade flows obey structural gravity, countries' bilateral trade imbalances are the result of macro trade imbalances, “triangular trade”, or pairwise asymmetric trade barriers. Using data for 40 major economies and the Rest of the World, we show that large and pervasive...

We investigate the role of cyclical factors in the adjustment of Italy's external balance from 2010, developing a model that infers the potential levels of domestic demand and of imports and exports from an exogenous measure of potential output, in an internally coherent fashion and also taking...

This paper studies the global imbalances that occurred in the first years of the twenty-first century. The analysis encompasses the two biggest countries in the world: the U.S.A. and China. Many authors defend the assertion that the relationship between the current accounts of these two...

Since 2011, Germany has consistently been the country posting the largest current account surpluses in the world. In recent years, this has led to a number of calls from economists and policy-makers in and outside Germany, and from international institutions and organisations, asking the Federal...

This article analyses how trade-related policy choices and financial development affect current account imbalances in OECD countries. Once the policy-related component of trade openness is estimated using exogenous-to-policy indicators of globalization pressures, legal origins and natural...