NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Determinants of External Imbalances: The Role Taxes, Government Spending and Productivity

Leonardo Leiderman, Assaf Razin

NBER Working Paper No. 3738 (Also Reprint No. r1708)
Issued in June 1991
NBER Program(s):   ITI   EFG   IFM

This paper develops and estimates a dynamic optimizing model of the current account. The model focuses, on real factors that determine the evolution of saving and investment, and hence the external balance. Three types of shocks are at the center of the analysis: productivity shocks, shocks to labor input, and tax policy shocks. While our approach is in line with the real business cycle models of the current account, the distinguishing feature of the work is the application of econometric methods to time series data for a small open economy so as to directly estimate the parameters governing saving and investment under rational expectations restrictions.

download in pdf format
   (399 K)

download in djvu format
   (274 K)

email paper

This paper is available as PDF (399 K) or DjVu (274 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w3738

Published: Journal of the Japanese and International Economies, Vol. 5, pp. 421-450, ( December 1991).

Users who downloaded this paper also downloaded these:
Razin w4334 The Dynamic-Optimizing Approach to the Current Account: Theory and Evidence
Obstfeld and Rogoff w4893 The Intertemporal Approach to the Current Account
Maria Milesi-Ferrett and Razin w5467 Sustainability of Persistent Current Account Deficits
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us