In this paper, we provide a test of the sustainability of external imbalances in the OECD countries, over the years 1970-2007. Specifically, we deal with the case of those countries that have experienced current account deficits in more than half of the years throughout the period of analysis,...

This paper studies the current account dynamics in the G-7 countries plus Spain. We estimate a SVAR model which allows us to identify three different shocks: supply shocks, real demand shocks and nominal shocks. We use a different identification procedure from previous work based on a...