The External Balance Assessment Methodology: 2018 Update

69 Pages Posted: 15 Apr 2019

See all articles by Luis Cubeddu

Luis Cubeddu

International Monetary Fund (IMF)

Signe Krogstrup

National Bank of Denmark - Economics Department; Danmarks Nationalbank (The Central Bank of Denmark); IMF

Gustavo Adler

International Monetary Fund (IMF) - Research Department

Pau Rabanal

International Monetary Fund

Mai Chi Dao

International Monetary Fund (IMF)

Swarnali Ahmed Hannan

International Monetary Fund (IMF)

Luciana Juvenal

International Monetary Fund (IMF)

Carolina Osorio-Buitron

International Monetary Fund (IMF)

Cyril Rebillard

International Monetary Fund (IMF)

Daniel Garcia-Macia

International Monetary Fund (IMF) - European Department

Callum Jones

International Monetary Fund (IMF)

Jair Rodriguez

International Monetary Fund (IMF)

Kyun Suk Chang

International Monetary Fund (IMF)

Deepali Gautam

International Monetary Fund (IMF)

Zijiao Wang

International Monetary Fund (IMF)

Date Written: March 2019

Abstract

The assessment of external positions and exchange rates is a key mandate of the IMF. This paperpresents the updated External Balance Assessment (EBA) framework-a key input in the conduct ofmultilaterally-consistent external sector assessments of 49 advanced and emerging marketeconomies-following the two rounds of refinements adopted since the framework was introduced in2012 (as described in Phillips et al., 2013). It also presents new complementary tools for shedding lighton the role of structural factors in explaining external imbalances and assessing potential biases in themeasurement of external positions. Remaining challenges and areas of future work are also discussed.

Keywords: External sector, Current account balances, Terms of trade, Current account surpluses, Current account deficits, current account, exchange rates, external sustainability, global imbalances., Eba, capital control, output gap, institutional quality, OAD

JEL Classification: F21, F30, F31, F41, F42, G15, G18, F32, O16, O24,

Suggested Citation

Cubeddu, Luis and Krogstrup, Signe and Adler, Gustavo and Rabanal, Pau and Dao, Mai Chi and Ahmed Hannan, Swarnali and Juvenal, Luciana and Osorio-Buitron, Carolina and Rebillard, Cyril and Garcia-Macia, Daniel and Jones, Callum and Rodriguez, Jair and Chang, Kyun Suk and Gautam, Deepali and Wang, Zijiao, The External Balance Assessment Methodology: 2018 Update (March 2019). IMF Working Paper No. 19/65, Available at SSRN: https://ssrn.com/abstract=3370961

Luis Cubeddu (Contact Author)

International Monetary Fund (IMF)

700 19th Street NW
Washington, DC 20431
United States

Signe Krogstrup

National Bank of Denmark - Economics Department ( email )

1093 Copenhagen
Denmark

Danmarks Nationalbank (The Central Bank of Denmark) ( email )

Havnegade 5
Copenhagen, 1093
Denmark

IMF ( email )

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

Gustavo Adler

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

700 19th Street NW
Washington, DC 20431
United States

Pau Rabanal

International Monetary Fund ( email )

700 19th Street NW
Washington, DC 20431
United States

Mai Chi Dao

International Monetary Fund (IMF)

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

Swarnali Ahmed Hannan

International Monetary Fund (IMF)

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

Luciana Juvenal

International Monetary Fund (IMF) ( email )

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

Carolina Osorio-Buitron

International Monetary Fund (IMF) ( email )

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

Cyril Rebillard

International Monetary Fund (IMF) ( email )

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

Daniel Garcia-Macia

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

700 19th Street NW
Washington, DC 20431
United States

Callum Jones

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

Kyun Suk Chang

International Monetary Fund (IMF) ( email )

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

Deepali Gautam

International Monetary Fund (IMF)

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

Zijiao Wang

International Monetary Fund (IMF)

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

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