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dc.contributor.authorMercereau, Benoîten_US
dc.contributor.authorMiniane, Jacques Alainen_US
dc.date.accessioned2009-08-12T07:17:04Z-
dc.date.available2009-08-12T07:17:04Z-
dc.date.issued2008en_US
dc.identifier.citationEconomics: The Open-Access, Open-Assessment E-Journal 2 2008-34 1-36 doi:10.5018/economics-ejournal.ja.2008-34-
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2008-34-
dc.identifier.urihttp://hdl.handle.net/10419/27518-
dc.description.abstractThe present value model of the current account has been very popular, as it provides an optimal benchmark to which actual current account series have often been compared. We show why persistence in observed current account data makes the estimated optimal series very sensitive to small-sample estimation error, making it almost impossible to determine whether the consumption-smoothing current account tracks the actual current account closely, or not closely at all. Moreover, the standard Wald test of the model will falsely accept or reject the model with substantial probability. Monte Carlo simulations and estimations using annual and quarterly data from five OECD countries strongly support our predictions. In particular, we conclude that two important consensus results in the literature - that the optimal series is highly correlated with the actual series, but substantially less volatile - are not statistically robust.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.subject.jelC11en_US
dc.subject.jelC52en_US
dc.subject.jelF32en_US
dc.subject.jelF41en_US
dc.subject.ddc330en_US
dc.subject.keywordCurrrent accounten_US
dc.subject.keywordpresent value modelen_US
dc.subject.keywordmodel evaluationen_US
dc.subject.stwLeistungsbilanzen_US
dc.subject.stwZeitreihenanalyseen_US
dc.subject.stwZeitpräferenzen_US
dc.subject.stwDynamische Investitionsrechnungen_US
dc.subject.stwTheorieen_US
dc.subject.stwOECD-Staatenen_US
dc.titleShould We Trust the Empirical Evidence from Present Value Models of the Current Account?en_US
dc.typeArticleen_US
dc.identifier.ppn584608845en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifweej:7401-
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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