The Impact of Cyclical Factors on the U. S. Balance of Payments

Author/Editor:

Joshua E. Greene ; Magda E. Kandil

Publication Date:

March 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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. 02/45

Subject:

English

Publication Date:

March 1, 2002

ISBN/ISSN:

9781451846485/1018-5941

Stock No:

WPIEA0452002

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

43

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