01856cas a2200253 a 4500 AALejournalIMF007329 230101c9999 xx r poo 0 0eng d 5.00 USD 9781462304240 1018-5941 BD-DhAAL BD-DhAAL Milesi-Ferretti, Gian. External Adjustment and the Global Crisis / Gian Milesi-Ferretti, Philip Lane. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (38 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students After widening substantially in the period preceding the global financial crisis, current account imbalances across the world have contracted to a significant extent. This paper analyzes the factors underlying this process of external adjustment. It finds that countries whose pre-crisis current account balances were in excess of what could be explained by economic fundamentals have experienced the largest contractions in their external balance. External adjustment in deficit countries was achieved primarily through demand compression, rather than expenditure switching. Changes in other investment flows were the main channel of financial account adjustment, with official external assistance and ECB liquidity cushioning the exit of private capital flows for some countries. Mode of access: Internet Lane, Philip. IMF Working Papers; Working Paper ; No. 2011/197 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/197/001.2011.issue-197-en.xml IMF e-Library