02310cas a2200301 a 4500 AALejournalIMF022362 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513584706 1018-5941 BD-DhAAL BD-DhAAL Kolerus, Christina. What Shapes Current Account Adjustment During Recessions? / Christina Kolerus. Washington, D.C. : International Monetary Fund, 2021. 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 This paper studies the dynamics of external accounts during 278 economic recession events in the past 60 years and sheds light on key factors that shape these patterns. Economic recessions trigger highly-persistent increases in the current account, driven by an initial, sharp decline in investment and fueled by medium term deleveraging, more so in advanced economies than in emerging markets. The strengthening of the current account is more pronounced when internal and external imbalances are present, and less when recessions are synchronized across countries. During severe natural disasters or epidemics, however, current accounts tend to weaken in the short term. Consistent with these findings, the COVID-19 shock, with comparatively moderate pre-existing imbalances yet high synchronization, had a muted effect on current account balances. The compositional changes, however, were unique and driven by unprecedented policy intervention, with record public dissaving more than offsetting exceptional private saving. Mode of access: Internet Capital and Ownership Structure imf Empirical Studies of Trade imf Financial Risk and Risk Management imf Financing Policy imf Open Economy Macroeconomics imf IMF Working Papers; Working Paper ; No. 2021/198 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/198/001.2021.issue-198-en.xml IMF e-Library