International Trade Imbalance: A Comparison of the U.S. and the U.K.
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This paper investigates macroeconomic determinants of the trade imbalance in the U.S. and the U.K. It is based on a simple DSGE model under perfect capital mobility and flexible exchange rates assumptions of the Mundell-Fleming international trade model. Results suggest both lagged by one period money component and lagged by one period first-order differenced government budget deficit were destabilizers for contemporaneous first-order differenced current account deficit in both countries for 1990-2012. The effect of government budget deficit was weaker. Lagged by one period first-order differenced personal consumption expenditure became a medium level destabilizer for U.S. and an insignificant stabilizer for U.K. for the same current account deficit variable. The Judd-Gaspar test suggests that this model is robust in accuracy for both nations.
Abstract
This paper investigates macroeconomic determinants of the trade imbalance in the U.S. and the U.K. It is based on a simple DSGE model under perfect capital mobility and flexible exchange rates assumptions of the Mundell-Fleming international trade model. Results suggest both lagged by one period money component and lagged by one period first-order differenced government budget deficit were destabilizers for contemporaneous first-order differenced current account deficit in both countries for 1990-2012. The effect of government budget deficit was weaker. Lagged by one period first-order differenced personal consumption expenditure became a medium level destabilizer for U.S. and an insignificant stabilizer for U.K. for the same current account deficit variable. The Judd-Gaspar test suggests that this model is robust in accuracy for both nations.
참고문헌 (49)
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