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International macroeconomic fluctuations and the current account


Hoffmann, Mathias (2003). International macroeconomic fluctuations and the current account. Canadian Journal of Economics / Revue Canadienne d'Economique, 36(2):401-420.

Abstract

Intertemporal models of the current account generally assume that global shocks do not affect the current account. We use this assumption to identify global and country-specific shocks in a bivariate VAR of output and the current account. Cross-country evidence from the G7 economies suggests that this identification works surprisingly well. We then employ our method to collect stylized facts on international macroeconomic fluctuations. We find that long-term output growth is driven mainly by global factors in most G7 countries and that country-specific shocks are less persistent and generally less volatile than global shocks.

Intertemporal models of the current account generally assume that global shocks do not affect the current account. We use this assumption to identify global and country-specific shocks in a bivariate VAR of output and the current account. Cross-country evidence from the G7 economies suggests that this identification works surprisingly well. We then employ our method to collect stylized facts on international macroeconomic fluctuations. We find that long-term output growth is driven mainly by global factors in most G7 countries and that country-specific shocks are less persistent and generally less volatile than global shocks.

Citations

8 citations in Web of Science®
9 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:20 May 2003
Deposited On:11 Feb 2008 12:29
Last Modified:05 Apr 2016 12:22
Publisher:Wiley-Blackwell
ISSN:0008-4085
Publisher DOI:10.1111/1540-5982.t01-1-00006

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