@techreport{Middendorf2004Characterizing,
abstract = {It is unclear whether the exceptionally highU.S. current account deficit can be
sustained for a prolonged period. In this paper we approach the topic whether
a gradual adjustment or a pronounced reduction of the deficit is likely to occur.
We therefore characterize the dynamics of the current account deficit
movements by a three-regime Markov-Switching model. Our finding is that it
is possible to distinguish a regime of a strong increasing deficit, a just slightly
increasing deficit and a regime of a deficit reduction. Furthermore we find that
movements of the deficit are asymmetric.Whereas expansions of the current
account deficit are long lasting, reductions of the deficit are rather short. This
implies that a pronounced reduction is not likely to occur. Secondly we try to
uncover determinants of regime shifts of the current account. Applying ordered
Logit models we conclude that a combination of U.S. inflation, U.S. investment
and share prices predicts pronounced changes in the current account
deficit quite reliably.},
author = {Torge Middendorf and Torsten Schmidt},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {C22; F32; C25; 330; Markov-Switching Model; Ordered Logit; Indicators; Leistungsbilanz; Zahlungsbilanzungleichgewicht; Markovscher Prozess; Sch\"{a}tzung; Vereinigte Staaten; regime switching},
language = {eng},
number = {24},
title = {Characterizing Movements of the U.S. Current Account Deficit},
type = {RWI Discussion Papers},
url = {http://hdl.handle.net/10419/18575},
year = {2004}
}
