Research Discussion Paper – RDP 9003 The Balance of Payments in the 1980s

Contents

• Introduction
• Analytical Framework
• The Chronology of the Current Account
• Causes of the Fluctuation in the Current Account
• Relative Prices and Resource Shifts
• Long-Term Equilibrium
• Some Unresolved Issues: Foreign Debt and the Equilibrating Role of the Exchange Rate
• Conclusion
• Appendix: Feldstein-Horioka Tests
• Bibliography
• Data Listing

This paper benefitted greatly from the advice of Stephen Crenville. I am also grateful for the thoughtful comments provided by Malcolm Edey, Jerome Fahrer, David Gruen, John Laker, Rory Robertson and Jenny Wilkinson. The paper has also incorporated several suggestions provided by John Pitchford. Finally, I would like to thank the staff of the Activity and Balance of Payments Sections of Research Department for their assistance during the preparation of the paper. Any remaining errors are mine. The views expressed in the paper are those of the author and do not necessarily reflect the views of the Reserve Bank.