Lau, Evan and Baharumshah, Ahmad Zubaidi and Habibullah, Muzafar Shah (2007): Accounting for the Current Account Behavior in ASEAN-5.
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Current account are an endogenous variable that contain information about the behavior of the economics agents and is important for economic policymaking as it gives a broad reflection of the stance of macroeconomics policies. The imbalances in current account are a reflection of the forward-looking, dynamic saving and investment decisions in the intertemporal approach to current account modeling. This study empirically analyzed the anatomy of the dynamic current account behavior for the ASEAN-5 countries using present value model. Despite the simplicity, the statistical computations suggest that the agents behave as the forward-looking rational agents in the face of the shocks in the three out of five economies. This implies that the current account acts as a buffer to smooth the consumption in the presence of shock and optimally smoothing its consumption path for these countries.
|Item Type:||MPRA Paper|
|Institution:||Universiti Malaysia Sarawak|
|Original Title:||Accounting for the Current Account Behavior in ASEAN-5|
|Keywords:||Current Account; Present Value Model; Consumption Smoothing; Consumption Tilting|
|Subjects:||F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements
O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity
|Depositing User:||Evan Lau|
|Date Deposited:||04. Jan 2007|
|Last Modified:||18. Feb 2013 18:36|
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