Volumen 12: Current Account and External Financing


Are international capital markets a source of stable and reliable financing for emerging market economies, or a source of instability? Is the pattern of capital flows from poor to rich countries observed in the past decade sustainable? What is the optimal degree of capital account openness both for inflows and for outflows? Should small emerging economies actively try to issue external liabilities in domestic currency?

This volume is an attempt to answer some of these questions, at both the theoretical and empirical level. All 15 papers add substantially to the body of theoretical findings, empirical research, and policy lessons on the behavior of the current account and the sources of external financing. Novel evidence is provided regarding sudden stops, international reserve management and fundamentals driving current accounts in commodity-exporting countries. Other analytical research addresses the adjustment of global imbalances and the causes and consequences of capital flows, current account adjustment in emerging economies, and the impact of stocks of international assets and liabilities and their valuation on international adjustment.

Editado por: Kevin Cowan; Sebastián Edwards; Rodrigo O. Valdés.




"A decade ago, capital flows te emerging economies stopped suddenly, leading to financial crises, job destruction, and political upheaval. Partly in response, the world has since restructured in radical ways: financial capital flows now go from developing countries to the United States; the current accounts of emerging economies show huge surpluses, leading to strong pressures for their currencies to appreciate and their net foreign reserves to balloon; and the forces towards recession, banking crises and stock markets crashes are coming from the center, not from the periphery. This excellent volume brings together several first rate contributions to the understanding of the origins, mechanisms, and policy implications of recent developments. This is essential reading, especially as we grapple to respond to the challenges created by the new global landscape."

Roberto Chang, Pofessor of Economics, Reutgers University

"A remarkably broad-ranging and eclectic collection of studies that span the key academic and policy debates underlying today's massive global current account imbalances. On the one hand, the imbalances show the huge upside to financial globalization, in terms of more efficient global utilization of savings and distribution of risk. On the other hand, as these research studies make clear, large current account imbalances still pose many risks."

Kenneth Rogoff, Harvard University