The relative dynamics of the current account and investment in the G7-Economies


Hoffmann, Mathias (2001) The relative dynamics of the current account and investment in the G7-Economies. The Economic Journal, 111, (471), 148-163. (doi:10.1111/1468-0297.00625).

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Original Publication URL: http://dx.doi.org/10.1111/1468-0297.00625

Description/Abstract

This paper contributes to the empirics of the intertemporal approach to the current account. We use a cointegrated VAR framework to identify permanent and transitory components of country-specific and global shocks. Our approach allows us to investigate empirically the sensitivity to persistence implied by many forward-looking models and our results shed new light on the excess volatility of investment encountered by Glick and Rogoff (1995). In G7 data, we find the relative current-account and investment response to be in line with the intertemporal approach.

Item Type: Article
ISSNs: 0013-0133 (print)
Related URLs:
Subjects: H Social Sciences > HB Economic Theory
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 32957
Date Deposited: 19 May 2006
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/32957

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