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Title: Imbalances For the Long Run
Authors: Henriksen, Espen
Lambert, Frederic
Keywords: net exports, current account, technology shocks
Issue Date: 28-Nov-2012
Abstract: Net exports and current account balances among developed countries, which contributed to the so called “global imbalances”, are highly persistent. Despite success along many dimensions, international business cycle models have difficulty replicating these salient, low-frequency features of international capital flows. In particular, net exports and current account balances are much more persistent in the data than in standard models. We document these important empirical facts about international capital flows. Further, we show that we can account for them with a parsimonious one-good two-country model with small, persistent differences in per capita GDP growth, matching those we observe among developed countries.
metadata.dc.rights: Copyright Espen Henriksen and Frederic Lambert, November 2012.
Appears in Collections:Economics Working Papers

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