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. citation courtesy of

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
Ventura w9163 Towards a Theory of Current Accounts
Kraay and Ventura w9030 Current Accounts in the Long and Short Run
 
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