Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144438
Authors: 
Jacob, Punnoose
Peersman, Gert
Year of Publication: 
2012
Series/Report no.: 
Working Paper Research 226
Abstract: 
In an estimated two-country DSGE model, we find that shocks to the marginal efficiency of investment account for more than half of the forecast variance of cyclical fluctuations in the US trade balance. Both domestic and foreign marginal efficiency shocks have a substantial impact on the variability of the imbalance. On the other hand, while traditional technology shocks can generate counter-cyclical trade balance dynamics, they matter very little for the overall forecast variance.
Subjects: 
Open Economy Macroeconomics
US Trade Balance
Investment Shocks
Bayesian Estimation of DSGE Models
JEL: 
C11
F41
Document Type: 
Working Paper

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