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Although capital inflows are generally beneficial to recipient countries, they also pose a challenge for the conduct of economic policy. This paper proposes a conceptual taxonomy to guide the design of policy responses in the face of capital flows. We explore how responses to capital surges should be differentiated based on the source of balance of payments pressures. We also examine whether the policy choices in emerging market countries conform to the taxonomy's predictions and find some correspondence, especially during periods of high global liquidity.

Exports and Imports --- Current Account Adjustment --- Short-term Capital Movements --- International Investment --- Long-term Capital Movements --- Open Economy Macroeconomics --- International economics --- Capital inflows --- Capital flows --- Current account surpluses --- Current account deficits --- Current account balance --- Balance of payments --- Capital movements --- Turkey

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This paper describes some long-run aspects of the Swiss balance of payments, highlighting two macroeconomic phenomena that make Switzerland stand out among other countries: first, it has had a persistent current account surplus and the largest ratio of net foreign assets to GDP in the world; second, its real interest rates have been significantly lower than those of most other industrialized countries, earning it the label “interest rate island”. These two distinctive features may be related, and ultimately both may result from an excess of national savings over investment for many years. The real interest differential may largely be attributed to a foreign exchange rate risk premium, which compensates Swiss residents for holding net assets in foreign currency and foreign residents for bearing net liabilities in Swiss francs.

Banks and Banking --- Exports and Imports --- Foreign Exchange --- Interest Rates: Determination, Term Structure, and Effects --- International Investment --- Long-term Capital Movements --- Current Account Adjustment --- Short-term Capital Movements --- International economics --- Finance --- Currency --- Foreign exchange --- Foreign assets --- Real interest rates --- Current account surpluses --- Interest rate parity --- Purchasing power parity --- External position --- Financial services --- Balance of payments --- Interest rates --- Investments, Foreign --- Switzerland

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The paper explores the relationship between trade policy and current accounts. The effect on the current account of a change in protection at home and then abroad is analyzed, assuming that the exchange rate floats. The “savings-and-investment approach” is used. It shows that there is no presumption that protection would reduce a deficit. With a fixed exchange rate, the effect on savings and investment is brought about by the reduction in absorption that is required to maintain internal balance when restrictions are imposed. A current account deficit or real appreciation may generate protectionist pressures stimulated by “conservative resistance.”.

Balance of payments --- Current Account Adjustment --- Current account deficits --- Current account surpluses --- Current account --- Exports and Imports --- Import quotas --- International economics --- International Trade Organizations --- International trade --- Macroeconomics --- Macroeconomics: Consumption --- National accounts --- Private savings --- Saving and investment --- Saving --- Short-term Capital Movements --- Trade Policy --- Wealth --- United States

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This paper explores, from an investment-saving perspective, the factors underlying the persistent widening of the current account surplus in the Netherlands since the early 1980s. Standard intertemporal models, even appropriately extended to incorporate specific features of the Dutch economy, do not appear to fully account for this development. Accordingly, the paper focusses attention on the production side of the economy to gain further insight into the trends of the current account. Empirical evidence suggests that changes in relative factor prices and a relative demand shift toward non-tradable goods account for the bulk of the observed widening of the current account surplus. In turn, the impact of these factors on the current account appears to reflect both changes in factor proportions and deviations from perfect competition in the Dutch sheltered sector.

Balance of payments --- Capacity --- Capital and Total Factor Productivity --- Cost --- Current Account Adjustment --- Current account surpluses --- Current account --- Exports and Imports --- Income economics --- Industrial productivity --- International economics --- Intertemporal Consumer Choice --- Labor economics --- Labor Economics: General --- Labor --- Labour --- Life Cycle Models and Saving --- Macroeconomics --- Open Economy Macroeconomics --- Production and Operations Management --- Production --- Real wages --- Short-term Capital Movements --- Total factor productivity --- Wages --- Wages, Compensation, and Labor Costs: General --- Netherlands, The

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China’s high corporate savings rate is commonly claimed to be a key driver for the country’s large current account surplus. The mainstream explanation for high corporate savings is a combination of windfall profits in state-owned firms, especially in resource sectors, and mis-governance of state-owned firms represented by their low dividend payout. The paper casts doubt on these views by comparing the savings of 1557 Chinese listed firms with those of 29330 listed firms from 51 other countries over 2002-07. First, Chinese firms do not have a significantly higher savings rate (as a share of total assets) than the global average because corporations in most countries have a high savings rate. The rising corporate savings rate is also consistent with a global trend. Second, there is no significant difference in the savings behavior and dividend patterns between Chinese majority state-owned and private listed firms, contrary to the received wisdom.

Corporations --- Self-financing --- Finance --- Khozraschet --- Business enterprises --- Corporate Finance --- Exports and Imports --- Money and Monetary Policy --- Current Account Adjustment --- Short-term Capital Movements --- Corporate Finance and Governance: General --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International economics --- Monetary economics --- Corporate finance --- Ownership & organization of enterprises --- Current account surpluses --- Currencies --- Current account --- Corporate sector --- Balance of payments --- Money --- Corporations--Finance --- China, People's Republic of