Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153874
Authors: 
Chudik, Alexander
Dieppe, Alistair
Ca' Zorzi, Michele
Year of Publication: 
2012
Series/Report no.: 
ECB Working Paper 1441
Abstract: 
The global financial crisis has led to a revival of the empirical literature on current account imbalances. This paper contributes to that literature by investigating the importance of evaluating model and parameter uncertainty prior to reaching any firm conclusion. We explore three alternative econometric strategies: examining all models, selecting a few, and combining them all. Out of thousands (or indeed millions) of models a story emerges. Prior to the financial crisis, current account positions of major economies such as the US, UK, Japan and China were not aligned with fundamentals.
Subjects: 
current account
global imbalances
model combination
Model uncertainty
panel data
JEL: 
C11
C33
F32
F34
F41
O52
Document Type: 
Working Paper

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