Current Account Imbalances in AsEAN Countries: Are they a Problem?

April 1, 1997

Preview Citation

Format: Chicago

Jonathan David Ostry. Current Account Imbalances in AsEAN Countries: Are they a Problem?, (USA: International Monetary Fund, 1997) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Applying a consumption-smoothing model to five ASEAN countries reveals that excessive private consumption has not tended to characterize their widening external imbalances in recent years, except to a small degree in Indonesia and Malaysia. Beyond consumption smoothing, however, a number of factors influence the desirability of running large external deficits, including the level and composition of external liabilities, the flexibility of macroeconomic policies, and the health of banking systems. Even when the current account deficit appears sustainable, there is a case to reduce them in order to lower the risks arising from such factors.

Subject: Balance of payments, Consumption, Consumption distribution, Current account, Current account balance, Current account deficits, National accounts

Keywords: Consumption, Consumption distribution, Consumption-smoothing model, Current account, Current account balance, Current account balance, Current account behavior, Current account deficit, Current account deficits, Current account imbalances in AsEAN country, Current account position, Current account positions of a number of ASEAN country, Current account sustainability, Debt ratio, Financial system, Fiscal policy, GDP deflator, Imbalances in AsEAN country, Positions in a number of ASEAN country, Widening deficit, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1997/051
Stock No:

WPIEA0511997
ISBN:

9781451847079
ISSN:

1018-5941

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