Consumption-Based Interest Rate and the Present-Value Model of the Current Account Evidence from Nigeria
30 Pages Posted: 1 Feb 2006
Date Written: July 2001
This paper presents a model of current account determination, based upon the permanent-income hypothesis. A present-value relationship among the current account, changes in net output, the exchange rate and the terms of trade is derived and the implications of such a relationship are tested using data for Nigeria during 1960-97.
Keywords: Present-value model, consumption-based interest rate, Nigeria
JEL Classification: F32, F41
Suggested Citation: Suggested Citation