2009 Reports

Patterns of Net Borrowing in Open Developing Economies

Ocampo, Jose A.; Rada, Codrina; Taylor, Lance

This short and final empirical chapter looks at net lending flows – incomes minus expenditures – over time for the government, private, and rest of the world "institutional sectors", normalized in all cases by GDP. Long debates and many policy recommendations have followed from the interpretation of how net lending by different sectors relate to each other. We therefore review the conceptual debate first. This also serves as an introduction to the short-term macroeconomic analysis of Chapter 7.