Universität zu Köln

Hoffmann, Mathias, Krause, Michael U. ORCID: 0000-0001-5265-3116 and Laubach, Thomas (2019). The Expectations-driven US Current Account. The Economic Journal, 129 (618). 897 - 925. OXFORD: OXFORD UNIV PRESS. ISSN 1468-0297

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Abstract

During the 1990s and 2000s, survey expectations of long-run output growth for the US relative to the rest of the world were highly correlated with the US current account, and thus, with global imbalances. We show that this finding is, to a large extent, predicted by a two-region stochastic growth model simulated using expected trend growth based on surveys. In line with the intertemporal approach to the current account, a major part of the build-up and subsequent reversal of the US current account deficit appears to be consistent with an optimal response of households and firms to changing growth prospects.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Hoffmann, Mathias UNSPECIFIED UNSPECIFIED UNSPECIFIED Krause, Michael U. UNSPECIFIED orcid.org/0000-0001-5265-3116 UNSPECIFIED Laubach, Thomas UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-157121
DOI:	10.1111/ecoj.12539
Journal or Publication Title:	The Economic Journal
Volume:	129
Number:	618
Page Range:	897 - 925
Date:	2019
Publisher:	OXFORD UNIV PRESS
Place of Publication:	OXFORD
ISSN:	1468-0297
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Weitere Institute, Arbeits- und Forschungsgruppen > Center for Macroeconomic Research (CMR)
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language MARKET BUSINESS CYCLES; GLOBAL IMBALANCES; CAPITAL FLOWS; OPEN-ECONOMY; NEWS; MODEL; FLUCTUATIONS Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/15712