Eskalacja nierównowagi zewnętrznej krajów zadłużonych w warunkach globalnej mobilności kapitału
Escalation of the External Disequilibrium of Indebted Countries Under Global Capital Mobility

Summary/Abstract: The paper includes an analysis of some factors conducing to the rise in the external disequilibrium of domestic economy, such as: debt crisis, fluctuation in capital flows, and the decreasing predictability of international solvency. None of these factors considered separately can explain well the causes of the rising external indebtness. Only an integrated analysis of all those interdependent factors allows to better understand the escalation of external imbalance in individual countries. The knowledge of these processes is the condition of the effectiveness of the adjustment attempts aimed at stabilizing capital flows and hampering the increase in external disequilibrium. On the basis of theoretical analysis, the author describes the processes and dependencies underlying fiscal expansion that lead to the emergence of budget deficits and to the increase of indebtness. The author explains the interaction between the major instruments of expansionary fiscal policy that result in the increase in current deficits and in the weakening of external balance. A separate part the analysis is devoted to the description of bahavioral factors shaping the attitudes and sentiments of the participants of financial markets, which determine their investment activity. The mechanism of the influence of behavioral factors is hidden, strongly stochastic, and its effects are difficult to be observed and foreseen. However, the experience of CEE countries suggests that this mechanism generates multiple signals indicating the appearance of a shock correction to the balance of payments as result of the increasing budgetary deficit and of the critical size of public debts.

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