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The impact of foreign direct investment (FDI) on environmental quality has been discussed in the environmental economics literature over the last decades. Within this scope, the pollution haven hypothesis (PHH) postulates that FDI inflows can cause environmental degradation in developing countries. Using data over the period 1993–2018 for 10 developing countries with current account deficits, this paper aims to test the validity of the PHH. Therefore, the paper examines whether or not developing countries face off a trade-off between financing current account deficits and environmental deterioration. The paper employs panel data methods that consider cross-sectional dependence. The empirical findings show that foreign direct investment inflows have no impact on environment, meaning the PHH does not dominate for these countries. Hence, the findings indicate that there is no trade-off between financing current account deficits and environmental deterioration. [ABSTRACT FROM AUTHOR]

This paper uses principal components analysis to describe the evolution of current account imbalances in a sample of 18 Organization for Economic Cooperation and Development countries from 1950 to 2020. The analysis shows, using only statistical methods, how two groups of countries formed in the 1980s. There is the current account surplus group including countries in Northern Europe, Japan and Switzerland and then the deficit group including the United States, the United Kingdom, Australia and several countries in Southern Europe. The divergence cannot be attributed to divergence in fiscal and monetary policy. Instead, there is some support for the thesis of Robert Aliber set out in another paper in this issue that capital flows between countries affect exchange rates, asset prices and the current account. The paper builds on two earlier papers in this journal by the same author, one showing how countries that have experienced a financial crisis tend to subsequently develop current account surpluses and the other showing how surpluses and deficits caused by capital flows affect the domestic real economy. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of four historical tropical storms on the Colonial Bank's operations in the British Caribbean between 1922 and 1927. By employing a high-frequency data set of bank transactions, this study reveals how these severe shocks influenced the banking activities of clients. The findings reveal a multifaceted and significant impact of tropical storm strikes on the banks' operations, particularly a surge in borrowing via overdrafts of current accounts. Moreover, the study reveals the multifaceted nature of such storms' impact on the bank's functionality, with affected branches demonstrating an uptick in deposits and savings as a strategy to mitigate funding shocks. The results of the econometric analysis indicate that the impact of such storms on banks' functionality during the early 20th century was significant and multidimensional. It highlights the critical role that the Colonial Bank plays in facilitating recovery from these devastating events and contributes to the existing literature by studying multiple shocks at different geographical locations and time frames. [ABSTRACT FROM AUTHOR]

This paper examines monetary policy spillovers from the US and the People's Republic of China (PRC) to real and financial sectors in advanced and emerging Asian economies over the period 2000 to 2020. Using a structural vector autoregression (SVAR) approach, we find that Asian economies overall are more susceptible to spillovers to GDP, inflation, and the current account emanating from monetary policy shocks in the PRC than to those from the US. This is related to high inter-regional trade integration in Asia and is in line with previous research findings. However, while the prevailing literature has highlighted the dominant role of US monetary policy as a transmitter of shocks to global and Asian financial markets, we find more persistence in the response of advanced Asian interest rates to PRC monetary policy shocks. In addition, emerging Asian economies are found to be more susceptible to shocks emanating from the PRC in respect of equity markets and exchange rates. The rising synchronization of Asian financial markets in relation to the PRC as the financial account in the PRC has gradually opened as well as indirect effects via trade and regional value chains help to rationalize our findings. [ABSTRACT FROM AUTHOR]

In this paper, score-driven time series models are used, in order to provide robust estimates of the seasonal components of Russian rouble (RUB) currency exchange rates for the period of 1999 to 2020. This paper is the first empirical application of score-driven models to the RUB to US dollar (USD) and RUB to Euro (EUR) currency exchange rates in the literature. The model includes score-driven local level, seasonality, and volatility components for a variety of probability distributions: Student's t distribution, skewed generalized t (Skew-Gen-t) distribution, exponential generalized beta distribution of the second kind (EGB2), normal-inverse Gaussian (NIG) distribution, and Meixner (MXN) distribution. The use of the MXN distribution is new in the literature of score-driven seasonality models. We show that the score-driven models of this paper are robust to changes in the currency exchange rate regimes of the Bank of Russia. We find that the annual seasonality of the RUB is significant, and it is in the range of ± 4 % . We review the determinants of the RUB seasonality using data on exports, imports, and primary income from the current account of the Russian Federation. The statistical performances of all score-driven models are superior to the statistical performance of the classical multiplicative seasonal autoregressive integrated moving average (ARIMA) model. Our results may motivate the practical use of score-driven models of the RUB exchange rate seasonality for financing, investment, or policy decisions. [ABSTRACT FROM AUTHOR]

The digitalisation of processes is a current topic in accounting. New technologies can change activities which in turn may require different skills from accounting graduates. This paper aims to shed light on the changes that digitalisation brings about in various areas of accounting by assessing the types of activities (non-routine and routine) and corresponding competences in the context of progressing stages of digitalisation. In addition, it is analysed how different technologies are used in these activities and where their execution is placed within the supply chain. The systematic literature review shows a lack of expertise in the field of digitalisation that enables graduates and employees to successfully manage respective processes in the workplace. While routine activities are continuously being automated or digitalised, non-routine activities and the corresponding skills have a similarly increasing importance for employees in accounting as the acquisition of general digital competences. [ABSTRACT FROM AUTHOR]

Portugal is one of the most externally indebted economies in the eurozone. The deeply negative net international investment position (NIIP) suggests that large current account surpluses will be needed in the future to restore external sustainability. Despite significant interest in the scope for external adjustment within a monetary union, little is known about the magnitude or likelihood of the relative price change required to facilitate this adjustment. Drawing on a new probabilistic framework of external sustainability, this paper estimates the likelihood that a real effective depreciation is needed to lower Portugal's net external liabilities to more prudent levels. Contrary to conventional thinking, we find that the NIIP is sustainable without real depreciation with fairly high probability, estimated between 32 and 43 percent. We highlight the predominance of financial account shocks over current account shocks in this assessment. To provide context to the assessment, we also apply the framework to Ireland. Despite a weaker NIIP than in Portugal, the probability that the external position is sustainable in Ireland is higher, estimated between 54 and 60 percent, predominantly reflecting forecasts of large and sustained trade surpluses. [ABSTRACT FROM AUTHOR]

In this paper we analyze whether the long-term economic growth of Kazakhstan is subject to macroeconomic constraints. The balance-of-payments-constrained growth (BPCG) models predict that a country's growth rate can be approximated through the ratio of growth rates of exports to the income elasticity of demand for imports. We apply the BPCG model to Kazakhstan's quarterly data—a typical emerging economy with a low trade to GDP ratio. To estimate the trade parameters we use Johansen's cointegration technique. Vector error correction model is employed to analyze the short-run adjustments of income elasticities. The results demonstrate that the average growth rate estimated by the BPCG hypothesis projects around 2% long-run economic growth for Kazakhstan and current economic growth is aggregate demand constrained. [ABSTRACT FROM AUTHOR]

This paper explores the issue whether feminism needs a metaphysical grounding, and if so, what form that might take to effectively take account of and support the socio-political demands of feminism; addressing these demands I further propose will also contribute to the resolution of other social concerns. Social constructionism is regularly invoked by feminists and other political activists who argue that social injustices are justified and sustained through hidden structures which oppress some while privileging others. Some feminists (Haslanger and Sveinsdóttir, Feminist metaphysics. In E. N. Zalta (Ed.), Stanford encyclopedia of philosophy. Stanford: Stanford University, 2011) argue that the constructs appealed to in social constructivism are real but not metaphysically fundamental because they are contingent. And this is exactly the crux of the problem—is it possible to sustain an engaged feminist socio-political critique for which contingency is central (i.e., that things could be otherwise) and at the same time retain some kind of metaphysical grounding. Without metaphysical grounding it has been argued, the feminist project may be rendered nonsubstantive (Sider, Substantivity in feminist metaphysics. Philosophical Studies, 174(2017), 2467–2478, 2017). There has been much debate around this issue and Sider (as an exemplar of the points under contention) nuances the claims expressed in his earlier writings (Sider, Writing the book of the world. Oxford: Clarendon Press, 2011) and later presents a more qualified account (Sider, Substantivity in feminist metaphysics. Philosophical Studies, 174(2017), 2467–2478, 2017). Nonetheless, I propose the critiques and defences offered by the various parties continue to depend on certain erroneous assumptions and frameworks that are challengeable. I argue that fundamentality as presented in many of these current accounts, which are underpinned by the explicit or implicit ontologies of monism and dualism and argued for in purely rationalist terms which conceive of subjects as primarily reason-responding agents, reveal basic irresolvable problems. I propose that addressing these concerns will be possible through an enactivist account which, following phenomenology, advances an ontology of interdependence and reconceives the subject as first and foremost an organism immersed in a meaningful world as opposed to a primarily reason-responding agent. Enactivism is thus, I will argue, able to legitimize feminist socio-political critiques by offering a non-reductive grounding in which not only are contingency and fundamentality reconciled, but in which fundamentality is in fact defined by radical contingency. My paper proceeds in dialogue with feminists generally addressing this 'metaphysical turn' in feminism and specifically with Sally Haslanger and Mari Mikkola. [ABSTRACT FROM AUTHOR]

An emerging type of photovoltaic (PV) system for which maximum power point tracking (MPPT) algorithms are scarce in the literature is the PV water heating system (PWHS). The application of existing PWHS-specific MPPT algorithms presents a significant difficulty in that none of them is able to provide, concurrently, low-complexity implementations and high tracking efficiencies. This paper addresses such challenge by proposing a novel impedance matching-based MPPT algorithm that has O(1)-complexity iterations and high efficiency for typical PWHS loads. Such efficiency improvement is achieved via generalization of a previous impedance matching algorithm, which is obtained by taking into account the effect of current harmonics into the impedance matching computations. The proposed algorithm is validated by means of simulation experiments, whose results confirm that it yields superior performance when compared to other low-complexity MPPT methods in the PWHS literature. [ABSTRACT FROM AUTHOR]

Over the years, policymakers have explored various combinations of varying degrees of monetary policy independence, exchange rate stability, and financial openness while recognizing that not all three policies can be achieved to the fullest extent – the "monetary trilemma" hypothesis. In recent years, holding international reserves (IR) has become an important policy instrument as a buffer or insurance against liquidity shortages. Significant and fundamental economic events such as currency crises have often changed the policy mix. In this paper, we find that countries' policy mixes have been diverse and varied over time from the perspective of the trilemma and also IR holding. We then illustrate how the combination of the three trilemma policies and IR holding drastically changed before and after the Asian Financial Crisis (AFC). However, the Global Financial Crisis did not lead to a drastic change in the policy arrangements. We find that countries that faced large terms of trade shocks or negative economic growth during the crisis increase IR holding in the post-AFC. Countries that had negative growth during the crisis also tend to pursue more exchange rate flexibility and more open financial markets. This characteristic is true for commodity exporters, but not for manufacturing exporters. Countries with large current account deficit (i.e., "large capital borrowers") tend to be more sensitive to economic growth at the time of the AFC. Countries that are under IMF stabilization programs or those with sovereign wealth funds tend to hold more IR. These characteristics were not found in the aftermath of the GFC. In general, countries increased their IR holdings after the GFC, but did not respond to the during-crisis economic and institutional conditions. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic has been accompanied on social media by an explosion of information disorders such as inaccurate, misleading and irrelevant information. Countermeasures adopted thus far to curb these informational disorders have had limited success because these did not account for the diversity of informational contexts on social media, focusing instead almost exclusively on curating the factual content of user's posts. However, content-focused measures do not address the primary causes of the infodemic itself, namely the user's need to post content as a way of making sense of the situation and for gathering reactions of consensus from friends. This paper describes three types of informational context—weak epistemic, strong normative and strong emotional—which have not yet been taken into account by current measures to curb down the informational disorders. I show how these contexts are related to the infodemic and I propose measures for dealing with them for future global crisis situations. [ABSTRACT FROM AUTHOR]

It is sometimes mentioned that Bernard Bolzano's work on grounding anticipates many insights of the current debate on metaphysical grounding. The present paper discusses a certain part of Bolzano's theory of grounding that has thus far not been discussed in the literature. This part does not so much anticipate what are nowadays common assumptions about grounding, but rather goes beyond them. Central to the discussion will be a thesis of Bolzano's by which he tries to establish a connection between grounding and (deductive) unification. The paper spells out this thesis in detail and discusses the assumptions on which it rests. Next to this mainly historical aim, the paper also presents reasons why philosophers who are not interested in the historical Bolzano should find the thesis interesting by relating it to a certain view on unification and explanation that has been put forward by Kim. A final part of the paper provides a critical evaluation of the thesis against the background of current accounts of grounding. [ABSTRACT FROM AUTHOR]

In this paper, we decompose the current account (CA) balance in 19 Euro area countries into cyclical and non-cyclical components. For the period 1999:Q1 to 2015:Q4, we compute income elasticities of imports and of exports via an alternative novel and improved approach by running time-varying coefficient models country-by-country. Then, in a panel set-up (and controlling for country-invariant characteristics), we uncover that terms of trade have a positive effect on both the cyclical and non-cyclical components of the CA, while the Global Financial Crisis, compensation of employees and the employment level have a negative effect on the cyclical component. Moreover, the crisis had a greater impact on the cyclical component of the CA due to movements in the real effective exchange rate. In addition, we find a negative effect of the crisis on the cyclical component of the CA for countries that received financial assistance from the European Union, notably Ireland, Portugal, Spain and Latvia. [ABSTRACT FROM AUTHOR]

Following the European Debt Crisis, there was a significant push for greater fiscal discipline across the EU member states. This began with the revitalization of the Stability and Growth Pact in 2011 and continued with the adoption of the Fiscal Stability Treaty of 2013. The measures were designed to maintain or achieve both government debt-to-GDP ratios of below 60% and government budget deficits of below 3%. This paper investigates whether the fiscal discipline measures had an impact on the relationship between fiscal and current account balances. Using the synthetic control method, we examine current account balances in each EU member state that implemented the fiscal provisions in the treaty (Title III), compared to a synthetic counterfactual economy. We find that countries most impacted by the European Debt Crisis experienced the greatest improvement in their current account deficits from the fiscal discipline measures. Several other EU member states also experienced stabilization in their current account balances compared to their synthetic counterfactuals. [ABSTRACT FROM AUTHOR]

A prominent feature within the sphere of international macroeconomics surrounds the notion of the domestic economy succumbing to a "sudden stop" — i.e. the point at which creditors are no longer willing to enter into fresh exposures vis-à-vis debtors. One avenue which has been increasingly adopted as a means to survey a nation's external sustainability (i.e. its vulnerability to sudden stops) is through the net international investment position (NIIP) — the difference between stocks of cross-border claims and liabilities. On the basis that financial account transactions are larger than current account transactions in terms of both volume and value, this paper by conjoining several strands of the international macroeconomics literature presents three motivations to suggest that the notion of external sustainability can be decoupled from the NIIP, namely that while a nation may in theory be a net creditor vis-à-vis the rest of the world in accordance with its NIIP, in reality, its susceptibility to sudden stops may be larger than an economy which is a net debtor as a consequence of (1) stock or (2) flow effects. Moreover, should the domestic economy succumb to a sudden stop as a result of either stock or flow effects, (3) this may not translate into changes to NIIP, thereby masking the fact that even though the domestic economy has succumbed to balance of payments difficulties, it continues to appear as a net creditor. To achieve its objectives, each motivative factor is presented through systems of financial accounts. Separate annexes also disseminate how delays between payment and settlement result in credit risks, in addition to how exchange rate fluctuations can impose accounting losses/gains on the balance sheets of counterparties. [ABSTRACT FROM AUTHOR]

Generative models have been proposed as a new type of non-representational scientific models recently. A generative model is characterized with the capacity of producing new models on the basis of the existing one. The current accounts do not explain sufficiently the mechanism of the generative capacity of a generative model. I attempt to accomplish this task in this paper. I outline two antecedent accounts of generative models. I point out that both types of generative models function to generate new homogenous models in the sense that the latter is a straightforward derivative of the former, both of which share many similar features. Unfortunately, both accounts are implicit about the generative capacity of generative models. Using a case study, I articulate that a two-staged process of abstraction and idealization in modeling may contribute to the generative capacity of a scientific model. I also demonstrate that this two-staged process may go beyond the capacity of generating new homogenous models to generating new heterogeneous models. [ABSTRACT FROM AUTHOR]

This paper aims to investigate the relationship between external imbalances and poverty in the Eurozone. The former are registered through the Target2 (T2) settlement mechanism and can be assimilated into changes in official reserves to cover the balance of payments disequilibrium in a fixed exchange rate regime. The presence of T2 discrepancies has led to differences in interest rates and increased distances in general living conditions inside the Eurozone. An empirical investigation implemented in 11 Eurozone countries reveals that T2 is negatively correlated with poverty, therefore allowing for an interpretation that approximates balance of payment crisis models. Results that appear to be robust to several control variables suggest that the policy framework of the Eurozone—in the absence of a compensatory mechanism—should be revised towards centralised fiscal instruments and anti-speculative monetary interventions. [ABSTRACT FROM AUTHOR]

This paper addresses the impact of countries' backward participation in global value chains (GVCs) on their current account balances. Our results, based on a large panel of 57 advanced and emerging countries, contradict the speculation that current account imbalances of countries that import intermediate products to be used in their exports, i.e., countries with important backward linkages, are likely to benefit more from GVC participation. On the contrary, the authors show that backward participation makes a negative contribution to current account balances; this result being valid for both manufactured goods and services, with a stronger impact for the latter. Overall, they find that while backward linkages may allow competitiveness gains from producing domestically and boost exports, the increase in imports of intermediates and final goods—mainly capital goods—that are not necessarily related to GVC participation, more than offset the trade balance effects of these gains. [ABSTRACT FROM AUTHOR]

The changing environment that the Euro has brought to its member countries could have fuelled the deteriorating effect that net capital inflows potentially have on their cost competitiveness. This paper uses a difference-in-differences (DID) approach to assess the effect of the Euro on the relationship between capital inflows, as measured by current account imbalances, and unit labour costs over the period 1993-2007. The sample used consists of annual data for 24 developed economies, comprising both the first EA12 countries as well as non-EA countries, with the latter used as the comparison group in the analysis. We find that the Euro seems to have amplified the deteriorating effect of capital inflows on costs. This finding suggests that the Eurozone should monitor cumulative current account imbalances, the associated inflows of capital, and the potential vulnerability of each country to the detrimental effects that capital inflows may have on their economies. [ABSTRACT FROM AUTHOR]

Motivated by the Weak Gravity Conjecture in the context of holography in AdS, it has been proposed that operators charged under global symmetries in CFTs, in three dimensions or higher, should satisfy certain convexity properties on their spectrum. A key element of this proposal is the charge at which convexity must appear, which was proposed to never be parametrically large. In this paper, we develop this constraint in the context of multiple Abelian global symmetries. We propose the statement that the convex directions in the multi-dimensional charge space should generate a sub-lattice of the total lattice of charged operators, such that the index of this sub-lattice cannot be made parametrically large. In the special case of two-dimensional CFTs, the index can be made parametrically large, which we prove by an explicit example. However, we also prove that in two dimensions there always exist convex directions generating a sub-lattice with an index bounded by the current levels of the global symmetry. Therefore, in two dimensions, the conjecture should be slightly modified to account for the current levels, and then it can be proven. In more than two dimensions, we show that the index of the sub-lattice generated by marginally convex charge vectors associated to BPS operators only, can be made parametrically large. However, we do not find evidence for parametric delay in convexity once all operators are considered. [ABSTRACT FROM AUTHOR]

This paper examines the effect of national government response measures to Covid-19 on German international capital flows. Analyzing highly disaggregated monthly data from the German balance of payments statistics over the period from January 2019 through January 2021, we find that bilateral financial interactions are negatively affected by stricter containment and closure policies as well as health system policies of a partner country, while German capital flows benefit from a partner's economic support policies. Moreover, to the extent that public interventions to fight the pandemic affect financial interactions, the adjustment mainly takes place along the intensive margin. [ABSTRACT FROM AUTHOR]

Air pollution has an important impact on both human health and sustainable economic development. The relationship of the current account, which is an important carrier of international economic activity, with air pollution has rarely been discussed by scholars. This paper aims to investigate how air pollution affects the current account and the mechanism of this effect. We conducted a theoretical analysis of the relationship between air pollution and the current account by adopting an extended form of the life-cycle model. Then, we used panel data (2000–2017) from 159 countries and the panel double fixed-effect method to empirically test the theoretical outcomes. We found that an increase in the degree of air pollution in a country leads to the deterioration of the domestic current account. In addition, air pollution changes the current account by affecting the demographic structure, following the "air pollution→demographic structure→current account" mechanism. The study also tested the robustness of the benchmark results by solving endogeneity problems, subsample regression and controlling measurement errors. Our findings are an important expansion and innovation for the research about the current account and have important implications for external economic equilibrium and sustainable economic development. [ABSTRACT FROM AUTHOR]

In Uganda's development aspiration "VISION 2040", Uganda aspires to transform its society from a peasant to a modern and prosperous middle-income country by 2040, with per capita income of USD 9, 567. To attain the vision, savings as a percentage of GDP should be over 35%. Notwithstanding such a high commitment, GDS as a percentage of GDP has remained below the desired target, standing at 16.5% in 2017. This paper investigated the determinants of Gross Domestic Savings (GDS) in Uganda for the period 1980–2017. The theoretical framework is based on the life-cycle/permanent-income hypothesis. Augmented Dickey Fuller and Phillips–Perron tests were utilized to test for the stationarity of the time series variables in the model. To test for both the short-run and long-run relationships among GDS and the independent variables, the ARDL bounds testing approach was adopted. The observational results indicate that in the long run, Gross Domestic Product growth rate (GDPg), Foreign Domestic Investments (FDI) and Broad money (M2) have positive and statistically significant effects on GDS, while Current Account Balance (CAB) and Gross National Expenditure (GNE) have negative impacts on savings. Deposit Interest Rate (DIR) was observed to be a statistically unimportant determinant of GDS in Uganda. In the short run, CAB has a positive and statistically significant impact on GDS while GDPg and DIR have a negative and statistically significant impact on GDS. The paper recommends increasing net exports through implementation of the industrial and export strategy espoused in the national development plan 2. In addition, the government should ensure a predictable economic environment to act as an assurance to the foreign investors that their investments will yield profits. [ABSTRACT FROM AUTHOR]

This paper provides new evidence of the existence and magnitude of the "twin deficits" in developing economies. It finds that 1 % of GDP unanticipated increase in the government budget balance improves, on average, the current account balance by 0.8 percentage point of GDP. This effect is substantially larger than that obtained using standard measures of fiscal impulse, such as the cyclically-adjusted budget balance. The results point to some heterogeneity across countries and over time. There is suggestive evidence that the effect tends to be larger: (i) during recessions; (ii) in countries that are more open to trade; (iii) that have less flexible exchange rate regimes; and (iv) with lower initial public debt-to-GDP ratios. [ABSTRACT FROM AUTHOR]

Renewable energy is in the center for providing a sustainable energy future. Renewables are the key for overcoming the energy problems. This paper investigated the dynamic and causal relationship among renewable energy production, current account balance, energy imports, renewable energy consumption, and economic growth in the 1976–2019 period for G20 countries through panel Fourier bootstrapping ARDL model. According to empirical results, the evidence of cointegration between the selected variables was determined. Results indicate that economic growth, energy imports, energy consumption, and current account balance provide the important impacts on renewable energy generations. Our results determined that there is a unidirectional causality from energy imports, renewable energy consumption, and current deficit to renewable energy production. As countries decrease their dependence on the imports of energy, this may both increase the quality of environment through production of more renewable energy and reduce current account imbalances. [ABSTRACT FROM AUTHOR]

Migration and remittances have always been an exciting arena of research for economists around the globe. Remittance flows have evolved as a significant economic variable over the past decade. In several developing countries, remittances exceed the other capital inflows and value of total exports. Thus, it is widely recognised as a potential funding source for economic development in emerging economies. The inflow of remittances to India has increased tremendously in the recent past making the country the highest recipient of remittances across the globe. Remittances are an essential component that contributes to narrowing the Current Account Deficit and has always been a stable constituent of the Balance of Payment. This paper is an attempt to explore the vital macroeconomic variables which determine the remittance flows to India. Notably, we enquire into the dominant motives of remittances in the Indian context. We employ an ARDL approach to cointegration to identify the macroeconomic determinants of remittances and find those crucial variables such as exchange rate, oil price, and domestic GDP substantially impact the flow of remittances. The results also indicate that the migrants are more vulnerable to the oil price shocks in host countries. The overall findings of our study are that (1) remittances are not countercyclical in the Indian context (2) remittances are subject to weak investment motive as opposed to the altruistic motive. [ABSTRACT FROM AUTHOR]

Under the assumption that the balance of the current account must satisfy the expected intertemporal balance, this paper seeks to establish a precondition for the recent currency crises in East Asian countries. Whenever current policy violates the expected intertemporal balance, it is argued that future policy changes (possibly including the exchange rate regime) are anticipated. Using Trehan and Walsh's [1991] result that nonstationarity of the change of assets is evidence of a violation of the expected intertemporal balance, this paper calculates the augmented Dickey-Fuller statistics of the current account prior to the East Asian currency crises. In each of these crises, there is evidence of a persistent violation of intertemporal balance prior to the crisis. There is also evidence of countries being affected by the plight of their neighbors. Their currencies depreciated even though it was not necessary. JEL (F31, F32, F33) [ABSTRACT FROM AUTHOR]

A new field-oriented control strategy for induction motor is proposed in the paper. It is called Maximum Torque Per Watt (MTPW) and allows obtaining the minimum value of the sum of the stator and rotor losses due to joule effect, and of the iron losses, for a given value of the reference torque and of the motor speed. Iron losses have been modeled according to Steinmetz equation, separating hysteresis and eddy currents and taking into account the dependence both on the frequency and on the peak value of the flux density. Numerical and experimental results are presented to confirm the validity of the proposed approach, which allows achieving significant improvements in the efficiency of induction motor drive. [ABSTRACT FROM AUTHOR]

The aim of this paper is two-fold. The first aim is to review the core representational and processing aspects of influential accounts of single-document and multiple-document comprehension with a particular emphasis on how readers negotiate conflicting information during reading. This review provides the groundwork for the second aim—to expand our current account of knowledge revision during reading of single documents to multiple documents. The product of this expansion is an initial conceptualization of the Knowledge Revision Components Framework–Multiple Documents (KReC-MD). This initial conceptualization presents the theoretical foundation necessary for future empirical work and further refinement. [ABSTRACT FROM AUTHOR]

Composition as identity is the view that a whole is identical to its parts taken collectively. Such a view raises the question of how the same portion of reality can be both one thing and many things. A primitivist view holds that there is no explanation to be had and that we simply need to accept that being one thing and being many things are compatible. One might think that we can do better by resorting to relativization. A relativist view may seem to explain how the same portion of reality can be both one thing and many things on the basis of the assumption that the portion of reality is these ways relative to different 'concepts' or 'counts'. This paper discusses whether relativization truly leads to a satisfactory explanation of how something can be both one thing and many things. The conclusion will be that, when we consider the current accounts of the involved parameters, these relativizations make no explanatory progress. [ABSTRACT FROM AUTHOR]

In this paper, we use a small open economy model with nontradable goods and time-varying interest rates to investigate the sources of fluctuations in Taiwan's current account. The correlation coefficient between the implied path of the current account generated from our model and the actual current account data exceeds 0.9, while tests of the cross-equation restrictions also support the model-implied present value relationship between the current account and other macroeconomic variables. We find the consumption smoothing channel, based on the discounted sum of the expected future net output growth, is the main channel for current account adjustment in Taiwan. Expected changes in the real effective exchange rate also account for much of the variation in the current account. [ABSTRACT FROM AUTHOR]

The generalization of learned behavior has been extensively investigated, but accounting for variance in generalized responding remains a challenge. Based on recent advances, we demonstrate that the inclusion of perceptual measures in generalization research may lead to a better understanding of both intra- and interindividual differences in generalization. We explore various ways through which perceptual variability can influence generalized responding. We investigate its impact on the ability to discriminate between stimuli and how similarity between stimuli may be variable, rather than fixed, because of it. Subsequently, we argue that perceptual variations can yield different learning experiences and that interindividual differences in generalized responding may be understood from this perspective. Finally, we point to the role of memory and decision-making within this context. Throughout this paper, we argue that accounting for perception in current generalization protocols will improve the precision of obtained generalization gradients and the ability to infer latent mechanisms. This can inspire future attempts to use generalization gradients as a (clinical) predictor or to relate them to individual traits and neural correlates and, ultimately, may lead to new theoretical and clinical insights. [ABSTRACT FROM AUTHOR]

In this paper we analyse the evolution of the current account as a percentage of GDP for a group of Central and Eastern European Countries. Instead of analysing only the variable for unit roots, we go a step further and test for different speeds of mean reversion dependent on break dates endogenously determined. We apply the Bai and Perron method to find that most countries have managed to balance their current account, but some of them should keep an eye on the low speed of mean reversion and the deviation of the time trend from balance. [ABSTRACT FROM AUTHOR]

This paper investigates how much of the current account adjustment after the global financial crisis in Spain can be explained by cyclical factors. For this purpose, we extend the IMF's external balance assessment methodology to allow for country-specific slopes and intercepts. The good fit of these cross-country regressions implies negligible residuals for most countries, and, as a result, the positive analysis of current account decompositions provides a more informative assessment of the external balance drivers. According to our findings, around 60% of the 11 pp. adjustment of the Spanish external imbalance over the years 2008–2015 can be explained by transitory factors such as the output gap, the oil balance, and the financial cycle—a share that diminished down to 50% during the more recent recovery period. The remaining adjustment of the Spanish external balance is explained by factors such as the cyclically adjusted fiscal consolidation, population ageing, lower growth expectations, or competitiveness gains, which can all be considered as more permanent phenomena. [ABSTRACT FROM AUTHOR]

This paper revisits the claim that flexible exchange rates facilitate external adjustment. While previous studies have used exchange rate regime as a proxy for exchange rate flexibility, in this study there is evidence of ARCH effects in exchange rate, and thus GARCH models are employed to estimate volatility. A dynamic panel data model is then specified, and the Arellano-Bond estimator and the Blundell-Bond estimator are employed to estimate the effect of exchange rate flexibility on the speed of adjustment of current account in a panel of 28 emerging and developing economies. There is robust evidence that flexible exchange rates indeed facilitate smoother adjustment of current account imbalances. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to investigate whether the current account balance can help in forecasting the quarterly S&P500-based equity premium out-of-sample. We consider an out-of-sample period of 1970:Q3 to 2014:Q4, with a corresponding in-sample period of 1947:Q2 to 1970:Q2. We employ a quantile predictive regression model. The quantile-based approach is more informative relative to any linear model, as it investigates the ability of the current account to forecast the entire conditional distribution of the equity premium, rather than being restricted to just the conditional-mean. In addition, we employ a recursive estimation of both the conditional-mean and quantile predictive regression models over the out-of-sample period which allows for time-varying parameters in the forecast evaluation part of the sample for both of these models. Our results indicate that unlike as suggested by the linear (mean-based) predictive regression model, the quantile regression model shows that the (changes in the) real current account balance contains significant out-of-sample information when the stock market is performing poorly (below the quantile value of 0.3), but not when the market is in normal to bullish modes (quantile value above 0.3). This result seems to be intuitive in the sense that, when the markets are performing average to well, that is performing around the median and above of the conditional distribution of the equity premium, the excess return is inherently a random-walk and hence, no information, from a predictor (changes in the real current account balance) is able to predict the equity premium. [ABSTRACT FROM AUTHOR]

Although currency adjustment is often proposed as a policy tool to reduce current account imbalances, there is no consensus regarding the macroeconomic effects. In this paper we study the macroeconomic aftermath of large exchange rate appreciations. Using a sample of 128 countries over the period 1960-2008, we identify 25 episodes of large nominal and real appreciations shocks. We use narrative identification of exogenous appreciation episodes and study the macroeconomic effects in a dummy-augmented panel autoregressive model. Our results indicate that exchange rate appreciations tend to have strong effects on current account balances. Within 3 years after the appreciation event, the current account balance on average deteriorates by three percentage points of GDP. This effect occurs through a reduction of savings without a meaningful reduction in investment. Real export growth slows down substantially, but the output costs are small and not statistically significant. All these effects appear somewhat more pronounced in developing countries. [ABSTRACT FROM AUTHOR]

We study the behaviour of real interest rate gaps—i.e. periods of real interest rates above (below) the natural interest rate—and link their length with a set of key observable determinants. Using quarterly data for 13 OECD countries over (close to) the last 60 years, we find that global risk-taking, CPI inflation, (un)conventional monetary policy, and income redistribution crucially shape the duration of both events. However, while labour-related supply-side factors appear to affect the length of positive interest rate gaps, the adoption of an inflation targeting regime and the current account balance seem to explain the duration of negative interest rate gaps. Our results suggest that the "normalisation" of the conduct of monetary policy is likely to be very gradual, and subject to spikes in uncertainty and financial markets' volatility. [ABSTRACT FROM AUTHOR]

The article offers a response to the article "Parity Reversion in Real Exchange Rates: Fast, Slow, or Not at All," which was featured in a previous issue of "IMF Staff Papers." The author notes that one has to look elsewhere for an explanation of a failure of price indices to revert at the mechanism that creates balance of payments equilibrium. He further identifies six factors that explain the tendency of national current account imbalances to continue for years and decades.

The aim of this paper is to study the main macroeconomic, financial and structural factors that shaped current account developments in Greece over the period from 1960 to 2007 and discuss these developments in relation to the issue of external sustainability. Concerns over Greece's external sustainability have emerged since 1999 when the current account deficit widened substantially and exhibited high persistence. The empirical model used, which theoretically rests on the intertemporal approach, treats the current account as the gap between domestic saving and investment. We examine the behaviour of the current account in the long run and the short run using co-integration analysis and a variety of econometric tests to account for the effect of significant structural changes in the period under review. We find that a stable equilibrium current account model can be derived if the ratio of private sector financing to GDP, as a proxy for financial liberalisation, is included in the specification. Policy options to restore the country's external sustainability are explored based on the estimated equilibrium model. [ABSTRACT FROM AUTHOR]

In this paper, a standard model of international transfer is augmented by the introduction of firm heterogeneity. The increase in aggregate exports in response to the transfer reflects extensive and intensive adjustments, as the sales of new exporting firms (extensive margin) contribute to the current account adjustment along with the sales of existing exporting firms (intensive margin). The relative size of the intensive and extensive margins of the adjustment is determined by the size dispersion of firms. The model calibrated to the observed distribution of firm sizes shows that the intensive margin is the predominant channel of the current account adjustment. The dampening effect of the extensive margin has therefore very little impact on the exchange rate adjustment. [ABSTRACT FROM AUTHOR]

This paper examines the global distribution of current accounts. Using a panel of more than 100 countries, the analysis establishes a set of stylized facts regarding the collective behavior of current accounts over the past four decades. In particular, we find that the global dispersion of current accounts has been steadily rising, which is qualitatively consistent with the view that ongoing financial globalization has allowed countries to maintain larger current account imbalances. However, this underlying trend is not quantitatively large enough to explain “global imbalances”—that is, the noticeable widening in external imbalances among major economies (for example, United States) seen in recent years.IMF Staff Papers (2009) 56, 574–595. doi:10.1057/imfsp.2009.12 [ABSTRACT FROM AUTHOR]

After a 30 years period of trials and errors in creating an Arab economic space for just independent countries and an insufficient implementation of the Euro-Mediterranean Free Trade Agreement (EU-MFTA), the economies of the MENA region have recently relied back on sub-regional trading blocks (Arab Unions) to succeed in opening and developing their economies. From a theoretical point of view this tendency is rising a debate on the possibility, for the Arab countries, to enjoy the dynamic effects that emerge from the internationalization process (like an increasing rate of investment, a higher intra-industry trade and reduced balance of payments distortions), given the structure and the performance of their economies. The aim of the paper is to present the contemporary trends of the economic integration process among the countries of the MENA Region in connection with the wider perspective adopted in the debate on this topic. A closer look at the intra-Arab flows of goods and services will thus enable us to appraise some facts concerning the process of internationalization of MENA economies, revealing an unexpected dynamism in the lights of “deep integration” perspective. On this base an account of the renewed bilateralism in economic relations will be provided. [ABSTRACT FROM AUTHOR]

The Harberger–Laursen–Metzler (HLM) effect predicts that an exogenous adverse shock to terms of trade of a small economy leads to deterioration in its current account balance, and conversely. Most countries across the globe, large or small, have adopted trade liberalization for economic prosperity, which make the terms of trade of much importance for policy making. In this paper, we examine the validity of the HLM effect for five of the eight members of South Asian Association for Regional Cooperation—a South Asian regional intergovernmental organization—over the period 1980–2015. Despite the potential for benefit from trade, the area remains understudied. We apply the cointegration and the Granger (non-) causality tests by employing both time series and panel methods. For a long-run equilibrium relationship, we implement the bounds testing approach, complemented by panel cointegration tests. For causality, in addition to testing for heterogeneous panels, we apply the conventional vector error correction model. We find support for the HLM effect for Bangladesh, Pakistan, Nepal, and Sri Lanka, but not India, the largest economy, conforming to the HLM prediction. The findings should help policymakers in assessing opportunities and challenges caused by exogenous shock from continued globalization and help to stay better prepared to address them. [ABSTRACT FROM AUTHOR]

Current descriptivist accounts of proper names entail two claims: (i) that the expressions we know as different proper names are the bearers of different meanings and (ii) that the descriptions corresponding to these meanings contain quotations of the expressions whose meanings they are taken to be. While (ii) is the source of a number of intractable problems, descriptivists feel committed to it because it is the only available option to adhere to (i), which they use to take as a matter of course. In the present paper I will bring up for discussion a, to my knowledge, new descriptivist account, inter-nominal descriptivism, which avoids the commitment to (ii) by rejecting (i). According to this account, all tokens of the expressions known as different proper names express the same descriptive mode of presentation and this descriptive mode of presentation is akin to the character of an indexical. I will try to show that, contrary to first appearance, this idea can be developed in a consistent and plausible manner. [ABSTRACT FROM AUTHOR]

A notable macroeconomic explanation of uneven development, with particular relevance to developing countries, has been the problem of balance of payments constraints, as captured by Thirlwall's Law: where relative growth rates are explained by differences between income elasticities for exports and imports. Araujo and Lima have formulated a one-country multisectoral disaggregation of this hypothesis using a vertically integrated input–output framework, which is extended here in two main ways. First, international trade in intermediate inputs—the basis for Global Value Chains—is introduced; second, the model is extended to multiple countries. The main outcome of the paper is the development of a new multisectoral method for modelling balance of payments constraints: a Multi-Country Sectoral Thirlwall Law (MCSTL) under which key sector relationships are nested in intercountry trading relationships that encompass both intermediate and final goods. The identification of this input–output structure is developed in analytical stages, moving from a one-country vertically integrated system, to two, three and finally multi-country systems. In addition to its theoretical contribution to understanding the industrial structure of trade, an implication of this multi-country/multi-sector approach is that it can also be tested in future empirical work using the recently available World Input–Output Database of national tables. [ABSTRACT FROM AUTHOR]

This paper investigates empirically the relationship between specialisation in the production of tradable output and the current account balance. According to the 'tradability hypothesis' that is examined, countries that specialise in highly tradable sectors tend to run current account surpluses while countries with dominant non-tradable sectors risk running current account deficits. In order to test this hypothesis empirically we develop a value-added based tradability index which captures the tradability of a country's output. Applied to a large sample of European countries, our empirical model provides strong evidence in favour of the tradability hypothesis. The main policy implication is that the anxieties about 'de-industrialisation' in large parts of Europe seem justified with a view to growing external imbalances. [ABSTRACT FROM AUTHOR]

In this paper, we re-examine the “PPP Puzzle” using sectoral disaggregated data. Specifically, we first analyse the mean reversion speeds of real exchange rates for a number of different sectors in 11 industrial economies and then focus on relating these rates to variables identified in the literature as key determinants of CPI-based real exchange rates, namely: the trade balance, productivity and the mark up. In particular, we seek to understand to what extent the relationships existing at the aggregate level are borne out at the disaggregate level. We believe that this analysis can help shed light on the PPP puzzle. [ABSTRACT FROM AUTHOR]

This paper explores the reasons why regional economics and policymaking do not focus on the regional balance of payments, although relevant imbalances – comparing with countries – may arise. The main purpose of the paper is, on one hand, to gauge the importance of these external imbalances in regional economies, with that concept being confined to the trade (goods and services) account. Notwithstanding the limited data available, empirical evidence for EU regions is put forward to supporting the idea that regions meet more frequently trade imbalances of relevant size than those faced by countries. Discussion centers as well on why regions can run wider trade deficits than nations and it is argued that as regions avoid sustainability constraints they may even benefit from those imbalances. [ABSTRACT FROM AUTHOR]