It is often argued that the United States cannot continue for long to run current account deficits of their current size of 5 per cent of Gross Domestic Product (GDP). This article questions this conventional wisdom by examining the implications were the United States to continue to run current...

This paper presents a small model of the Australian macroeconomy. The model is empirically based, aggregate in nature and consists of five estimated equations – for non-farm output, the real exchange rate, import prices, unit labour costs and consumer prices. The stylised facts underlying each...

The output gap is of central interest to policymakers. Being unobservable, however, its estimation is prone to error, particularly in real time. Errors result from revisions to the data and unavoidable end-point problems associated with the econometric techniques used to estimate it. Copyright...