The Austrian current account deficit: Driven by twin deficits or by intertemporal expenditure allocation?
Sylvia Kaufmann (),
Georg Winckler and
Additional contact information
Georg Winckler: University of Vienna, Department of Economics, Hohenstaufengasse 9, A-1010 Vienna
Empirical Economics, 2002, vol. 27, issue 3, 529-542
The evidence presented in the paper rejects the twin deficit hypothesis for the Austrian current account balance during the last two decades. The results are based on an estimate of a vector error correction model including quarterly data for the current account balance and potentially relevant variables driving its dynamics. We compute the variance decomposition of the current account's forecast error and its generalized impulse responses to shocks in the innovations of the system. The results in favor of intertemporal expenditure reallocation cannot be reproduced within a second analysis including the current account and a measure of net output, however. The estimated implicit current account balance, interpreted as the discounted expected change in future net output, does not follow the actual behaviour of the current account.
Keywords: current; account; ·; Mundell-Fleming; model; ·; Ricardian; equivalence; ·; vector; error; correction; and; vector; autoregression; ·; variance; decomposition; ·; impulse; response; analysis (search for similar items in EconPapers)
JEL-codes: F32 F41 (search for similar items in EconPapers)
Note: received: June 1999/Final version received: March 2001
References: Add references at CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed
Downloads: (external link)
Access to the full text of the articles in this series is restricted
Working Paper: The Austrian current account deficit: Driven by twin deficits or by intertemporal expenditure allocation? (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:27:y:2002:i:3:p:529-542
Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2
Access Statistics for this article
Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund
More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().