An Update on Medium-Term Determinants of Current Account Balances The "Savings Glut" Hypothesis Examined

摘要: This note updates the estimates reported in study by Chinn and Prasad (2003), which provided an empirical investigation of medium-term determinants current accounts for a large sample industrial developing countries, uses those to assess recent hypotheses regarding evolution external imbalances, namely “savings glut”. The focus is on results from panel regression techniques are used characterize variation account across 117 countries over 33 years. We find that balances positively correlated with government budget initial stocks net foreign assets. Most other variables not statistically significant consistent manner. One key finding we obtain this extended sample, balance has positive impact upon industrialized countries. In fixed effects regression, coefficient as high 0.38. also that, while country underpredicted, U.S. overpredicted only 1.2 percentage points GDP. last result casts doubt overseas glut” hypothesis reason 4.4 deficit run 2001-03.