TY  - JOUR
AU  - Leiderman,Leonardo
AU  - Razin,Assaf
TI  - Determinants of External Imbalances: The Role Taxes, Government Spending and Productivity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3738
PY  - 1992
Y2  - April 1992
UR  - http://www.nber.org/papers/w3738
L1  - http://www.nber.org/papers/w3738.pdf
N1  - Author contact info:
Leonardo Leiderman
Department of Economics
Tel-Aviv University
Ramat Aviv  69978
ISRAEL
E-Mail: leoleid@post.tau.ac.il

Assaf Razin
Department of Economics
Cornell University
Uris 422
Ithaca, NY 14853
Tel: 607/255-9625
Fax: 607/255-2818
E-Mail: ar256@cornell.edu
AB  - 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.
ER  -