The IMF's Unreasonable External Balance Benchmarks

The IMF's Unreasonable External Balance Benchmarks

The International Monetary Fund’s (IMF) latest External Sector Report has plenty of interesting material, including welcome attention to some suspicious discrepancies in China’s balance of payments that I and others have been highlighting for the past three years. But like its predecessors, it is also marred by some methodological flaws that undermine the entire exercise. The net effect is that the IMF understates the severity of existing imbala…