Current account deficits: the Australian debate
Large and persistent current account deficits are frequently raised as a cause for concern for a number of reasons. Perhaps the key concern is that countries in this situation could be on a path to insolvency, building up excessive net foreign debt, raising the prospects of default or a sharp revers...
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| Autores principales: | , , |
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| Formato: | Artículo |
| Lenguaje: | eng |
| Publicado: |
Banco Central de Chile
2019
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/20.500.12580/3743 |
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| Sumario: | Large and persistent current account deficits are frequently raised as a cause for concern for a number of reasons. Perhaps the key concern is that countries in this situation could be on a path to insolvency, building up excessive net foreign debt, raising the prospects of default or a sharp reversal in capital flows, which might force an abrupt and costly adjustment.1 Large deficits and rising indebtedness could also leave countries more vulnerable to adverse external shocks, including a change in sentiment on the part of foreign creditors. Some argue that policymakers should take steps to ensure that countries move toward a sustainable position in which the current account deficit is not so large that it will lead to an excessive build-up in foreign indebtedness. |
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