The Impact of Cyclical Factors on the U. S. Balance of Payments
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Summary:
Real GDP growth and real effective exchange rate (REER) appreciation appear cointegrated with the current and financial accounts of the U.S. balance of payments. On this basis, we estimate reduced form equations showing that expected changes and shocks to real GDP, the REER, energy prices, and growth in emerging market economies and other industrial countries explain much of the short-term variation in the U.S. current account balance, with the balance worsening as real GDP, energy prices, and the REER increase. In addition, foreign direct investment rises with real growth, while stock market prices affect the composition of capital inflows.
Series:
Working Paper No. 2002/045
Subject:
Balance of payments Current account Current account balance Energy pricing Expenditure Financial account Foreign exchange Real effective exchange rates
English
Publication Date:
March 1, 2002
ISBN/ISSN:
9781451846485/1018-5941
Stock No:
WPIEA0452002
Pages:
43
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