What Determines the Current Account? A Cross-Sectional and Panel Approach

42 Pages Posted: 15 Feb 2006

See all articles by Guy Debelle

Guy Debelle

Reserve Bank of Australia

Hamid Faruqee

International Monetary Fund (IMF) - Research Department

Date Written: June 1996

Abstract

This paper uses cross-section and panel data to examine the determinants of the current account. The empirics find a significant impact of the stage of development and demographic factors in the cross section. Estimating partial-adjustment and error-correction models using panel data, the paper finds a short- and long-run impact of fiscal policy on the current account in the time series. The real exchange rate, the business cycle and the terms of trade are also shown to have short-run effects on the current account, while the stage of development and demographics have longer-run effects.

JEL Classification: C33, F32, F41

Suggested Citation

Debelle, Guy and Faruqee, Hamid, What Determines the Current Account? A Cross-Sectional and Panel Approach (June 1996). IMF Working Paper, Vol. , pp. 1-42, 1996. Available at SSRN: https://ssrn.com/abstract=882958

Guy Debelle (Contact Author)

Reserve Bank of Australia ( email )

65, Martin Place
Sydney, NSW 2000
Australia

Hamid Faruqee

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
1,546
Abstract Views
3,742
rank
11,069
PlumX Metrics