The External Balance Assessment (EBA) Methodology

69 Pages Posted: 29 Jan 2014

See all articles by Steven Phillips

Steven Phillips

International Monetary Fund (IMF) - Western Hemisphere Department

Luis Catão

International Monetary Fund (IMF)

Luca A. Ricci

International Monetary Fund (IMF) - Research Department

Rudolfs Bems

International Monetary Fund (IMF); European Central Bank (ECB)

Mitali Das

International Monetary Fund (IMF)

Julian di Giovanni

Federal Reserve Banks - Federal Reserve Bank of New York; Universitat Pompeu Fabra - Department of Economics and Business; Barcelona Graduate School of Economics (Barcelona GSE); CREI and Universitat Pompeu Fabra; Centre for Economic Policy Research (CEPR)

D. Filiz Unsal

International Monetary Fund (IMF) - Research Department

Marola Castillo

International Monetary Fund (IMF) - Research Department

Jungjin Lee

International Monetary Fund (IMF)

Jair Rodriguez

International Monetary Fund (IMF)

Mauricio Vargas

affiliation not provided to SSRN

Date Written: December 2013

Abstract

The External Balance Assessment (EBA) methodology has been developed by the IMF’s Research Department as a successor to the CGER methodology for assessing current accounts and exchange rates in a multilaterally consistent manner. Compared to other approaches, EBA emphasizes distinguishing between the positive empirical analysis and the normative assessment of current accounts and exchange rates, and highlights the roles of policies and policy distortions. This paper provides a comprehensive description and discussion of the 2013 version (“2.0”) of the EBA methodology, including areas for its further development.

Keywords: Current account, Exchange rates, Real effective exchange rates, Monetary policy, Fiscal policy, Fiscal sustainability, Economic models, global imbalances, net foreign assets, current accounts, private credit, reserve currency, current account balances, reserve accumulation, domestic debt, external liabilities, central banks, current account deficit, current account deficits, reserve currencies, fiscal gaps, fiscal “ gap, current account surpluses, private debt, current account adjustments, budget balance, reserve holdings, net debtor, capital account liberalization

JEL Classification: F21, F31, F32, F41, F42, G15, O16, O24

Suggested Citation

Phillips, Steven and Catão, Luis and Ricci, Luca Antonio and Bems, Rudolfs and Das, Mitali and di Giovanni, Julian and Unsal, D. Filiz and Castillo, Marola and Lee, Jungjin and Rodriguez, Jair and Vargas, Mauricio, The External Balance Assessment (EBA) Methodology (December 2013). IMF Working Paper No. 13/272, Available at SSRN: https://ssrn.com/abstract=2387536

Steven Phillips

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Luis Catão

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Luca Antonio Ricci

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6007 (Phone)
202-623-4072 (Fax)

Rudolfs Bems

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Mitali Das

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Julian Di Giovanni

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

HOME PAGE: http://julian.digiovanni.ca

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Barcelona
Spain

HOME PAGE: http://julian.digiovanni.ca

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

HOME PAGE: http://julian.digiovanni.ca

CREI and Universitat Pompeu Fabra ( email )

HOME PAGE: http://julian.digiovanni.ca

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

HOME PAGE: http://julian.digiovanni.ca

D. Filiz Unsal

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Marola Castillo

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Jungjin Lee

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jair Rodriguez

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mauricio Vargas

affiliation not provided to SSRN

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