Does Capital Mobility Finance or Cause a Current Account Imbalance?

22 de marzo de 2006   | Vistas: 2694 |  

Antonio H. D. Yan looks at the debate surrounding current account imbalance and presents the results of his recent study, which was published in 2007. He discusses two key current issues, the demobilization of capital mobility and persistent current account deficit, which were seen in Mexico from 1994-1995 and during the Asian crisis of 1997-1998. In this presentation he examines causality and explores the differences between developed and developing countries. Yan explains how current account imbalances adjust and form part of the business cycle in developed countries. According to Yan, developing countries are more vulnerable to free capital mobility, where it is demand-induced, and in emerging economies the financial account causes current account deficit.


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Universidad Francisco Marroquín