flow approaches

graphically illustrate how the neglect of gross flows, when only net flows are considered, can lead to misdiagnoses of financial vulnerability.

Then, graphically illustrate how the inattention to the effects of international currencies may lead to erroneous conclusions on exchange rate adjustment.

Next, graphically illustrate how sectoral differences between corporate and official sector positions can distort welfare conclusions on the consequences of currency depreciation, as macroeconomic risks may be underestimated.