Methodology for Current Account and Exchange Rate Assessments

Kincaid, G.; Fetherston, Martin; Isard, Peter; Faruqee, Hamid

doi:10.5089/9781589060814.084

Cited by 21 publications

(5 citation statements)

References 19 publications

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“…The IMF and the BIS produce a CPI-linked measure of the REER, while the CBI produces two measures-one, linked to changes in CPI, and the other, linked to changes in unit labor costs (Figure 8). The methodologies used in this paper for estimating REER equilibrium are summarized in IMF ( 2006), while further details can be found in Isard et al (2001) and Isard and Faruqee (1998). The first approach-the Macroeconomic Balance Approach (MB)-constructs a current account norm based on an empirical relationship between the current account and a set of fundamentals.…”

Section: Data Methodology and Resultsmentioning

confidence: 99%

“…The difference between the current account norm and the projected current account determines the necessary adjustment. To convert current account adjustment into REER adjustment, the elasticity of current account with respect to REER is constructed based on a non-oil export volume elasticity of 0.71, a non-oil import volume elasticity of 0.92, and the 2006 ratios of exports and imports to GDP (see Isard et al, 2001).…”

Section: A the Macroeconomic Balance Approachmentioning

confidence: 99%

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Estimating Iceland's Real Equilibrium Exchange Rate

Tchaidze

2007

SSRN Journal

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Section: Data Methodology and Resultsmentioning

confidence: 99%

Section: A the Macroeconomic Balance Approachmentioning

confidence: 99%

Estimating Iceland's Real Equilibrium Exchange Rate

Tchaidze

2007

SSRN Journal

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“…is the external intertemporal budget constraint approach based on trade flows (see Milesi-Ferrett and Razin, 1996;Faruqee and Debelle, 1998;Kincaid et al, 2001;Chinn and Prasad, 2003;Jeong and Mazier, 2003;Coudert and Couharde, 2007;Lee et al, 2008;Lane andMilesi-Ferretti, 2012, andGnimassoun et al (2013), among others). The second is the valuation effect approach based on the dynamic of net foreign assets.…”

Section: Theoretical Framework On Current Accountmentioning

confidence: 99%

Current Account Deficits and Sustainability in Africa: Evidence from Cointegration Approach

Kouassi

Kolotioloman

Juana

2020

Preprint

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This paper gives an overview of current accounts sustainability in forty African countries over the 1980–2016 period. The paper goes through by testing if this sustainability depends on regional blocs, income levels or exchange rate regimes. For this purpose, the paper employs a formal theoretical framework, recent cointegration techniques like threshold cointegration to test for long-run relationship between variables. Results reveal that although exports and imports plus interest payments on external debt are cointegrated in African economies, the current accounts are weakly sustainable in 45% of African economies and unsustainable in only 8%. Among regional blocs, income level and exchange rate regime groupings, only exchange rate regime groupings have a significant eﬀect on current account sustainability. Since current account is strong sustainable in countries operating ﬂexible and intermediate exchange rate regimes than countries operating fixed regimes.JEL Codes: F32, C23, C22

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“…Bajo el supuesto de que el país se caracteriza por tener una economía abierta y pequeña, con flujos de capitales flexibles, el au-mento en la tasa externa estimula el ahorro y desplaza la línea ahorro-inversión (S-I) a la derecha, compatible con una mejora en el resultado de la cuenta corriente y un aumento en el tipo real de cambio. Para un análisis más detallado de este enfoque, véase Isard et al (2001).…”

Section: Análisis De La Sostenibilidad Externa Basado En El Equilibri...unclassified

Programación financiera: Fundamentos teóricos y aplicación práctica al caso de Costa Rica

Juan-Ramón,

Da Costa

2011

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Este libro examina los fundamentos teóricos de un programa financiero utilizado en Costa Rica, describe la evolución de las principales variables de los sectores real, monetario, fiscal y externo de Costa Rica, en particular para 2004-2008, analiza algunas de las políticas económicas de ese período necesarias para realizar las proyecciones del ejercicio de programación financiera, y presenta resultados de estimaciones econométricas que pueden ser útiles tanto para el análisis como para la proyección de las variables. Por último, hace referencia al proceso de preparación de un programa financiero, desde el diagnóstico inicial hasta la elaboración de un escenario central de programa y escenarios alternativos con distintos balances de riesgos.

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Methodology for Current Account and Exchange Rate Assessments

Cited by 21 publications

References 19 publications

Estimating Iceland's Real Equilibrium Exchange Rate

Estimating Iceland's Real Equilibrium Exchange Rate

Current Account Deficits and Sustainability in Africa: Evidence from Cointegration Approach

Programación financiera: Fundamentos teóricos y aplicación práctica al caso de Costa Rica

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