EconPapers    
Economics at your fingertips  
 

The behaviour of the real exchange rate and current account

Gil Kim, Lian An () and Yoonbai Kim ()

Macroeconomics and Finance in Emerging Market Economies, 2012, vol. 5, issue 2, 139-160

Abstract: This paper investigates the joint dynamic response of the current account and the real exchange rate to permanent and temporary shocks using structural VAR models for seven developed and five developing countries. Due to the ambiguity of the unit roots test, model specification based on both stationary and non-stationary current accounts are employed. Capital flows are also included to capture external shocks as well as potential structural breaks due to financial liberalization. We find that the differences between the results when the current account is modelled as stationary and non-stationary are non-trivial. Changes inthe current account are mainly driven by temporary shocks such as monetary shocks or disturbances while real exchange rate fluctuations are dominated by permanent shocks.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/17520843.2011.653891 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:macfem:v:5:y:2012:i:2:p:139-160

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REME20

DOI: 10.1080/17520843.2011.653891

Access Statistics for this article

Macroeconomics and Finance in Emerging Market Economies is currently edited by Subrata Sarkar and Ashima Goyal

More articles in Macroeconomics and Finance in Emerging Market Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2022-08-15
Handle: RePEc:taf:macfem:v:5:y:2012:i:2:p:139-160