Current Account and Transitory Deviations of Terms of Trade and Export Volumes: Chile 1985-1999
Abstract
To limit the risks of a sudden stop in external financing that would jeopardize intertemporal consumption smoothing, the current account deficit should be limited to sustainable levels. However, the volatility of the terms of trade and some export volumes cause difficulties in assessing a sustainable current account level. This paper provides a “trend indicator” for the current account based on “normalized” external prices and export volumes. Thus the exercise allows evaluating, in a simple and timely fashion, whether the deficit level is sustainable and, if not, demand adjustment measures are needed to correct it.
Downloads
Downloads
Published
How to Cite
Issue
Section
License
Copyright / Open Access Policy: This journal provides immediate free open access to its content on the principle that making research freely available to the public supports a greater global exchange of ideas and is distributed under the terms and conditions of the Creative Commons Attribution License (CC BY).
The copyright will be retained by the authors. Articles are free for personal use but are protected by copyright in the sense that they may not be used for purposes other than personal use without the permission of the author.