INTERTEMPORAL CURRENT ACCOUNT AND PRODUCTIVITY SHOCKS: EVIDENCE FOR SOME EUROPEAN COUNTRIES

Fernando Pérez de Gracia () and Juncal Cuñado ()

No 01-05, Working Papers from Asociación Española de Economía y Finanzas Internacionales

Abstract: In most intertemporal models of the current account, country specific productivity has ambiguous effects on the current account depending on whether consumption effect or investment effect dominates. The objective of this paper is to investigate the role of productivity shocks, in combination with investment behavior, as a source for current account dynamics for some European countries during the period 1960-2000. We decompose total productivity shocks between global and specific shocks and we examine the role of global and country specific productivity shocks for the current account and investment dynamics.

Keywords: current account; productivity shocks; investment (search for similar items in EconPapers)
JEL-codes: C32 F41 F47 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2001-04
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Working Paper: Intertemporal Current Account and Productivity Shocks: Evidence for Some European Countries
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