The present value model of the current account has been very popular, as it provides an optimal benchmark to which actual current account series have often been compared. We show why persistence in observed current account data makes the estimated optimal series very sensitive to small-sample...

The article reminds of two seminal contributions by Fritz Walter Meyer and Paul Anthony Samuelson who showed that Hume's price specie flow is logically incorrect.

In den südeuropäischen Krisenländern Griechenland, Portugal und Spanien erfolgen bereits merkliche Anpassungen, die dort infolge der Leistungsbilanzdefizite und der hohen Auslandsverschuldung notwendig sind. Die Wachstumsraten der realen Exporte waren zuletzt überaus kräftig. Zum Teil...

The topic of contagion has gained importance in the last few decades, earning its place amongst the most debated topics in international economics. Contagion is a phenomenon where market disturbances in crisis times are observed to spread from one country to the other in the form of comovements...

Using the framework of a dynamic intertemporal optimization model of an open economy, it is shown that the long-run investment-saving correlation follows directly from the economy’s dynamic budget constraint and this does not depend on the degree of international capital mobility. Therefore,...

This paper makes three contributions: First, I construct annual time series of gross domestic investment and national saving in the U.S. for the 1897–1949 period using historical component series. I compare the qualitative and quantitative properties of the newly constructed series with the...

The aim of this paper is to identify the different shocks that could affect the current account in the argentine case, such as the terms of trade (the Harberger-Laursen-Metzler effect- HLM), supply shocks (productivity), demand shocks (real exchange rate and public consumption /current GDP) and...

This paper analyses the incidence and severity of sudden stops in euro area countries before and after the introduction of the ECB's asset purchase programmes. We define sudden stops as abrupt declines in private net financial inflows, i.e. total flows adjusted for EU and IMF loans and changes...

Long- and short-run current account balance (CAB) determinants of the nineteen Eurozone (EZ) member states vis-a-vis the United States (US) are examined. Particularly, the competitiveness of the EZ vs the US, the relationship between the current account deficit and the budget deficit (twin...

The economic literature indicates that the loans relative to GDP in the economy, are important factors that influence the current account movements in a country. Therefore, the purpose of this study is estimating and then quantifying the effects that household and corporate loans have on the...