Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71904
Authors: 
Hoffmann, Mathias
Krause, Michael U.
Laubach, Thomas
Year of Publication: 
2013
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 10/2013
Abstract: 
Since 1991, survey expectations of long-run output growth for the U.S. relative to the rest of the world exhibit a pattern strikingly similar to that of the U.S. current account, and thus also to global imbalances. We show that this finding can to a large extent be rationalized in a two-region stochastic growth model simulated using expected trend growth filtered from observed productivity. In line with the intertemporal approach to the current account, a major part of the buildup of the U.S. current account deficit appears to be driven by the optimal response of households and firms to improved growth prospects.
Subjects: 
open economy
stochastic trend growth
Kalman filter
news shocks
JEL: 
F32
E13
E32
D83
O40
ISBN: 
978-3-86558-898-2
Document Type: 
Working Paper

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