Dissecting the dynamics of the US trade balance in an estimated equilibrium model

Punnoose Jacob and Gert Peersman ()

No 226, Working Paper Research from National Bank of Belgium

Abstract: In an estimated two-country DSGE model, we find that shocks to the marginal efficiency of investment account for more than half of the forecast variance of cyclical fluctuations in the US trade balance. Both domestic and foreign marginal efficiency shocks have a substantial impact on the variability of the imbalance. On the other hand, while traditional technology shocks can generate counter-cyclical trade balance dynamics, they matter very little for the overall forecast variance.

Keywords: Open Economy Macroeconomics; US Trade Balance; Investment Shocks; Bayesian Estimation of DSGE Models (search for similar items in EconPapers)
JEL-codes: C11 F41 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2012-08
New Economics Papers: this item is included in nep-dge and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Dissecting the dynamics of the US trade balance in an estimated equilibrium model (2013)
Working Paper: Dissecting the dynamics of the US trade balance in an estimated equilibrium model (2013)
Working Paper: Dissecting the Dynamics of the US Trade Balance in an Estimated Equilibrium Model (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201208-226

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