International macroeconomic fluctuations and the current account

Mathias Hoffmann

Canadian Journal of Economics, 2003, vol. 36, issue 2, 401-420

Abstract: Intertemporal models of the current account generally assume that global shocks do not affect the current account. We use this assumption to identify global and country-specific shocks in a bivariate VAR of output and the current account. Cross-country evidence from the G7 economies suggests that this identification works surprisingly well. We then employ our method to collect stylized facts on international macroeconomic fluctuations. We find that long-term output growth is driven mainly by global factors in most G7 countries and that country-specific shocks are less persistent and generally less volatile than global shocks.

JEL-codes: C32 F41 F43 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (24)

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