Robustness of Macroeconomic Indicators of Capital Mobility
Summary:
The performance of macroeconomic indicators of capital mobility is examined in the context of an intertemporal equilibrium model of a small open economy. Recursive numerical solution methods are used to compute measures of consumption smoothing, savings-investment correlation, and the variability and output-correlation of investment that characterize the model in the presence of income disturbances. None of these statistics is a reliable indicator of capital mobility unless information regarding differences in preferences, technology, and the nature of stochastic shocks can be taken into account.
Series:
Working Paper No. 1992/111
Subject:
Business cycles Consumption Economic growth External position Foreign assets International trade Labor National accounts Trade balance
English
Publication Date:
December 1, 1992
ISBN/ISSN:
9781451853391/1018-5941
Stock No:
WPIEA1111992
Pages:
40
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