Amdur, David and Ersal Kiziler, Eylem (2012): Trend shocks and the countercyclical U.S. current account.
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From 1960-2009, the U.S. current account balance has tended to decline during expansions and improve in recessions. We argue that trend shocks to productivity can help explain the countercyclical U.S. current account. Our framework is a two-country, two-good real business cycle (RBC) model in which cross-border asset trade is limited to an international bond. We identify trend and transitory shocks to U.S. productivity using generalized method of moments (GMM) estimation. The specification that best matches the data assigns a large role to trend shocks. The estimated model generates a countercyclical current account without excessive consumption volatility.
|Item Type:||MPRA Paper|
|Original Title:||Trend shocks and the countercyclical U.S. current account|
|Keywords:||Current account; trend shocks; business cycles; open economy macroeconomics; DSGE models; GMM estimation|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles
F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth
|Depositing User:||David Amdur|
|Date Deposited:||19. Jul 2012 02:57|
|Last Modified:||23. Apr 2015 11:37|
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