Thousands of models, one story: current account imbalances in the global economy

Michele Ca' Zorzi, Alistair Dieppe and Alexander Chudik

No 1441, Working Paper Series from European Central Bank

Abstract: The global financial crisis has led to a revival of the empirical literature on current account imbalances. This paper contributes to that literature by investigating the importance of evaluating model and parameter uncertainty prior to reaching any firm conclusion. We explore three alternative econometric strategies: examining all models, selecting a few, and combining them all. Out of thousands (or indeed millions) of models a story emerges. Prior to the financial crisis, current account positions of major economies such as the US, UK, Japan and China were not aligned with fundamentals. JEL Classification: C11, C33, F32, F34, F41, O52

Keywords: current account; global imbalances; model combination; model uncertainty; Panel data (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-cba and nep-opm
Note: 343031
References: Add references at CitEc
Citations: View citations in EconPapers (116)

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Related works:
Journal Article: Thousands of models, one story: Current account imbalances in the global economy (2012)
Working Paper: Thousands of Models, One Story: Current Account Imbalances in the Global Economy (2011)
Working Paper: Thousands of models, one story: current account imbalances in the global economy (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20121441

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