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International capital mobility: An alternative test based on intertemporal current account models

Chao-Hsi Huang

International Review of Economics & Finance, 2010, vol. 19, issue 3, 467-482

Abstract: This paper examines international capital mobility by estimating intertemporal current account models for nine major industrialized countries. To account for the large fluctuations of oil prices (the terms-of-trade) and their effects on the current account, an intertemporal current account model incorporating such effects is devised. The model estimation reveals significant terms-of-trade effects on the current account and, moreover, does not exhibit any "excess capital mobility" found in the previous literature. These results indicate that to achieve a more accurate measure of international capital mobility, a proper account of the terms-of-trade effect is essential.

Keywords: International; capital; mobility; Intertemporal; current; account; model; Terms; of; trade (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (8)

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