0 a bank account that you can take money from at any time and that usually earns little or no interest --
1 a bank account that you can take money from at any time and use for making payments , that usually earns little or no interest: --
2 a measure of the money going into and out of a country in the form of exports and imports, income from interest and payments from foreign stocks, and other payments: --
Therefore, the current account will be more affected the shorter-lasting is the perturbation.
These market entries result in a remanent positive effect on the current account.
This intertemporal constraint imposes an additional constraint on the evolution of the economy, determining the stable adjustment of the current account.
The current account surplus accompanied by the surge in capital inflows in the mid-1990s put too much strain on that strategy.
In fact, our contribution complements two studies that propose a new explanation of deficit-surplus sequence of the current account using an intertemporal-maximizing framework.
However, the consequent overvaluation tends to generate unsustainable current account deficits that only continued inflows of capital can finance.
It guarantees that the initial (equilibrium) level of the current account will be regained in the new steady state.
The opportunity for a successful switch may also be improved to the degree that the economy is protected from problems on the current account.