Current Account Reversals and Persistency in Transition Regions

The article investigates sharp reductions seen in current account deficits in transition countries in the 1992-2003 period. By using both descriptive statistical approaches as well as panel regression-based analysis the article focuses on three important aspects of these current account reversals: a) to examine those factors that might have triggered the reversals and to provide some insights into the current account adjustment process; b) to reveal some characteristics of persistent current account deficits; and c) to investigate the direct impact of these reversals on economic growth in the region.