When are policy makers willing to make costly adjustments to their macroeconomic policies to mitigate balance-of-payments problems? Which types of adjustment strategies do they choose? Under what circumstances do they delay reform, and when are such delays likely to result in financial crises?...

The global financial and economic crisis and the euro-crisis in particular, which was grabbing headlines at the time of writing, demonstrate unmistakably that external imbalances can pose significant fiscal challenges. Although the nature of these challenges differs between deficit and surplus...

When are policy makers willing to make costly adjustments to their macroeconomic policies to mitigate balance-of-payments problems? Which types of adjustment strategies do they choose? Under what circumstances do they delay reform, and when are such delays likely to result in financial crises?...