TY - BOOK ID - 11260119 TI - External Balance in Low Income Countries AU - Christiansen, Lone Engbo. AU - Prati, Alessandro. AU - Ricci, Luca. AU - Tressel, Thierry. AU - International Monetary Fund. PY - 2009 SN - 1451917880 1451873689 1282844253 9786612844256 1452792437 1462312373 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Business & Economics KW - Economic Theory KW - Macronomics KW - Foreign exchange rates KW - Finance, Public KW - Econometric models. KW - Developing countries KW - Economic policy. KW - Exports and Imports KW - Foreign Exchange KW - Macroeconomics KW - Current Account Adjustment KW - Short-term Capital Movements KW - Personal Income, Wealth, and Their Distributions KW - International Investment KW - Long-term Capital Movements KW - International economics KW - Currency KW - Foreign exchange KW - Current account KW - Real exchange rates KW - Personal income KW - Capital account liberalization KW - Foreign assets KW - Balance of payments KW - Income KW - Investments, Foreign KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:11260119 AB - This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to official external financing, and the role of shocks. In addition to more standard factors, we find that domestic financial liberalization is associated with higher current account balances and net foreign asset positions, while capital account liberalization is associated with lower current account balances and net foreign asset positions and with more appreciated real exchange rates. Negative exogenous shocks tend to raise (reduce) the current account in countries with closed (opened) capital accounts. Finally, foreign aid is progressively absorbed over time through net imports, and is associated with a more depreciated real exchange rate in the long-run. ER -