The Current Account of Saudi Economy through Intertemporal Model: Evidence from SVAR

A Structural VAR Approach to the Intertemporal Model of the Current Account

The intertemporal current account approach predicts that the current account of a small open economy is independent of global shocks, and that responses of the current account to countryspecific shocks depend on the persistence of the shocks. The author shows that these predictions impose cross-equation restrictions (CERS) on a structural vector autoregression (SVAR). To test the CERs, the auth...

The role of two interest rates in the intertemporal current account model ∗

The paper analyses the role of the lending-deposit interest rate spread in the dynamics of the current account in developing countries. For that purpose we extend the standard perfect-foresight intertemporal model of the current account for the existence of the interest rate spread and simulate the convergence path of developing economies. This model helps explain why in many cases it is optima...

Intertemporal Dynamics: Convergence Speed of Current Account across Countries

Empirical data shows that current account has the property of mean-reversion and the speed of current account convergence is heterogenous across countries. In order to explore the factors which affect the current account adjustment speed of a small country, this paper builds up a model to study how current account would be affected by factors such as labor supply and monetary policies. We found...

Tari®s, Unemployment, and the Current Account: An Intertemporal Equilibrium Model¤

This paper integrates labor market search into a dynamic general equilibrium model to analyze the macroeconomic e®ects of a tari®. The search friction creates a wedge between the marginal product of labor and the product wage. With perfectly °exible prices and wages, the model captures the intuitive e®ect that a permanent increase in the tari® improves the country's terms of trade, which tends ...

Analysis of China's current account: Evidence based on Inter-temporal Current Account Model