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| Tekijä: | Sheffrin, S. M. Woo, W. T. |
| Otsikko: | Present value tests of an intertemporal model of the current account |
| Lehti: | Journal of International Economics
1990 : NOV, VOL. 29:3/4, p. 237-253 |
| Asiasana: | CONSUMPTION DYNAMIC MODELS WEALTH ECONOMETRIC MODELS NET PRESENT VALUE GOVERNMENT OPEN ECONOMY GROSS NATIONAL PRODUCT |
| Kieli: | eng |
| Tiivistelmä: | The model studies presents a wide variety of structures but preserves the essential feature, that consumption depends solely on a country's wealth. It is demonstrated that in a simple intertemporal open economy the current account is equal to the expected decline of the present discounted value of net output of a country. Net output is defined as gross domestic product less the sum of investment plus government spending. Formal statistical tests as well as measures of how well the model performs for four countries are presented. The model performs reasonably well for Belgium and Denmark but fails for Canada and the United Kingdom. Extension of the approach in several areas is suggested. |
SCIMA