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Accounting for Global Dispersion of Current Accounts

We undertake a quantitative analysis of the dispersion of current accounts in an open economy version of incomplete insurance model, incorporating important market frictions in trade and financial flows. Calibrated with conventional parameter values, the stochastic stationary equilibrium of the mode...

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Bibliographic Details
Main Author: Lee, Jaewoo
Other Authors: Chang, Yongsung, Kim, Sun-Bin
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2009
Series:IMF Working Papers
Subjects:
Investments, Foreign
Balance Of Trade
Current Account
Short-term Capital Movements
Current Account Imbalances
Current Account Adjustment
Balance Of Payments
Trade Balance
Long-term Capital Movements
Exports And Imports
International Economics
Foreign Assets
Current Account Balance
Empirical Studies Of Trade
International Investment
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:We undertake a quantitative analysis of the dispersion of current accounts in an open economy version of incomplete insurance model, incorporating important market frictions in trade and financial flows. Calibrated with conventional parameter values, the stochastic stationary equilibrium of the model with limited borrowing can account for about two-thirds of the global dispersion of current accounts. The easing of financial frictions can explain nearly all changes in the current account dispersion in the past four decades whereas the easing of trade frictions has almost no impact on the current account dispersion
Physical Description:33 pages
ISBN:9781451874211

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