In turn, we can decompose the current account balance
into two terms
For instance, temporary shocks depreciate the real exchange rate and improve current account balance
while permanent shocks though appreciate the exchange rate but the effect on current account balance
is not consistent.
Table 1 reports our estimates of the number and location of the breakpoints in the current account balance
and government budget balance.
Reference to the domestic accounts identity (above) makes it clear that any expansion of the fiscal deficit lowers public saving and theoretically contributes to the negative side of the current account balance
Ricardian Equivalence suggests that the budget balance and current account balance
are not directly related, as concluded from the traditional model.
While those measures had dramatically reduced gold imports and improved the current account balance
, they also pushed up premiums in the domestic market, sparking a rise in smuggling.
The country's current account balance
"is likely to maintain a surplus" for the time being, Minami said.
Despite Londoners maintaining the highest current account balances
, they also rack up the biggest overdrafts, with the average in the city being pounds 961.
In Brazil, the current account balance
, which measures the flow of money in and out of a country and also is a good indicator of economic health, is posting a surplus rather than its traditional deficit.
A ministry official said it is difficult to predict the future trend of the current account balance
because it depends on the situation of overseas economies, but indicated it is in a rising trend as the trade surplus is in an upward swing and the income account surplus continues to increase.
The current account balance
is like a profit and loss statement of a country.
NONTRADE CURRENT ACCOUNT TRANSACTIONS The nontrade portion of the current account balance
increased $8 billion in 1989 to a net surplus (excluding capital gains and losses) of $10 billion (table 7).