NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Current Accounts and Exchange Rates: A New Look at the Evidence

Greg Leonard, Alan C. Stockman

NBER Working Paper No. 8361
Issued in July 2001
NBER Program(s):   IFM

This paper 'goes back to basics' in empirical analysis of the J-Curve. First, we document strong violations in the distributional assumptions that underlie nearly all previous work on this issue. Second, we employ distribution-free, non-parametric statistical tests to characterize the data and summarize the key relationships between real exchange rates, the current account, and real GDP. We find some (weak) evidence of a J-Curve in the data. Interestingly, however, we document that this evidence is not consistent with the standard theoretical explanation of the J-Curve. Consequently, our empirical results pose a strong challenge for international economic theory.

download in pdf format
   (222 K)

email paper

This paper is available as PDF (222 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8361

Published: Leonard, Greg and Alan C. Stockman. "Current Accounts And Exchange Rates: A New Look At The Evidence," Review of International Economics, 2002, v10(3,Aug), 483-496.

Users who downloaded this paper also downloaded these:
Aizenman w1177 A Theory of Current Account and Exchange Rate Determinations
Lee and Chinn w6495 The Current Account and the Real Exchange Rate: A Structural VAR Analysis of Major Currencies
Aizenman w12734 International Reserves Management and the Current Account
Kraay and Ventura w9030 Current Accounts in the Long and Short Run
Ventura w9163 Towards a Theory of Current Accounts
 
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