Bussière, Matthieu; Fratzscher, Marcel; Müller, Gernot J. - 2004
The paper extends the standard intertemporal model of the current account to include two important stylised facts: (1 …) the persistence of current account positions and (2) the relevance of the fiscal balance. Specifically, the paper derives … to obtain a dynamic model for the current account where fiscal deficits have an effect. The model is estimated for a …