International Capital Flows and National Creditworthiness: Do the Fundamental Things Apply as Time Goes by?

41 Pages Posted: 15 Feb 2006

See all articles by Paul Anthony Cashin

Paul Anthony Cashin

International Monetary Fund (IMF)

C. John McDermott

Reserve Bank of New Zealand

Date Written: December 1998

Abstract

This paper examines the optimality of international capital flows to a persistent net importer of capital, Australia, during its post-capital-controls period 1984-98. The results suggest that international capital flows were larger than optimal during the 1980s, but in the 1990s such flows have been broadly consistent with those predicted by the consumption-smoothing approach to the determination of the current account. The paper also discusses the main implications arising from measures of optimal capital flows, and compares them with the implications arising from the key concepts used in the determination of national creditworthiness.

Keywords: consumption smoothing, international capital flows, structural break, Australia

JEL Classification: F32, F41, F47

Suggested Citation

Cashin, Paul Anthony and McDermott, C. John, International Capital Flows and National Creditworthiness: Do the Fundamental Things Apply as Time Goes by? (December 1998). IMF Working Paper No. 98/172, Available at SSRN: https://ssrn.com/abstract=883298

Paul Anthony Cashin (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

C. John McDermott

Reserve Bank of New Zealand ( email )

2 The Terrace
P.O. Box 2498
Wellington, 6011
New Zealand

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
57
Abstract Views
777
rank
409,297
PlumX Metrics