We develop a Global VAR (GVAR) model for current account analysis. The model includes major economies involved in global imbalances and a few key macro variables to comprehensively examine the relations between these economies and the causality of the variables. We estimate the GVAR model based...

The combination of American excess consumption and China's financial extravaganza in accumulating US treasuries has been widely perceived as a major contributor to global imbalances. The current research examines whether this curious partnership can be sustained by concentrating on the Chinese...