Long-run growth expectations and "global imbalances" : [Version October 20, 2010]

  • Discussions of the international dimension of the global economic crisis have frequently focused on the build-up of large current account "imbalances" since the mid-1990s. This paper examines the extent to which the U.S. current account can be understood in a purely real open-economy DSGE model, were agents' perception of long-run growth evolves over time in response to changes in productivity. We first show that long-run growth forecasts based on …ltering actual productivity growth comove strongly with survey measures of expectations. Simulating the model, we …nd that including data on U.S. TFP growth and the world real interest rate can, under standard parametrizations of our model, explain the evolution of the U.S. current account quite closely. With household preference that allow positive labor supply e¤ects after favorable news of future income, we can also generate output movements in line with the data.

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Author:Mathias Hoffmann, Michael U. Krause
Document Type:Report
Year of Completion:2010
Year of first Publication:2010
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2014/12/01
Tag:Kalman …lter; Open economy DSGE models; real-time data; trend growth
GND Keyword:USA; Wirtschaftswachstum; Produktivität; Adaptive Erwartung; Erwartungsbildung; Konjunktur; Umfrage; Leistungsbilanz; Außenwirtschaftliches Gleichgewicht; Zahlungsbilanzausgleich; Zahlungsbilanzungleichgewicht; Dynamisches Gleichgewicht; Offene Volkswirtschaft
Issue:October 20, 2010
Page Number:35
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht