The intertemporal approach to the current account: Evidence for Argentina
AbstractThe Argentinean current account has exhibited large fluctuations over time. Sizable deficits over the last part of the 19th century and beginning of the 20th were followed by an almost equilibrated balance for most of the 20th century. Moderate deficits were again recorded between 1990 and 2002. Can factors highlighted by the intertemporal approach to the current account explain the dynamics of the Argentinean external sector for the 1885-2002 period? To answer this question we make use of a model featuring two main external shocks for small economies: real interest rates and exchange rates. In contrast to its application to other Latin American countries, the intertemporal model does not track well the actual current account from 1885 to 2002 in Argentina. This is due to the country’s lack of access to the international financial system (a main assumption in the model), the occurrence of balance of payments crises, and the stop and go process. There is, however, some evidence in favor of the theor y for the period 1885-1930, when capital mobility was relatively high and free of currency crises and stop and go cycles.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Universidad del CEMA in its journal Journal of Applied Economics.
Volume (Year): XI (2008)
Issue (Month): (November)
Contact details of provider:
Postal: Av. Córdoba 374, (C1054AAP) Capital Federal
Phone: (5411) 6314-3000
Fax: (5411) 4314-1654
Web page: http://www.cema.edu.ar/publicaciones/jae.html
More information through EDIRC
Other versions of this item:
- Diego N. Moccero, 2006. "The Intertemporal Approach to the Current Account: Evidence from Argentina," Department of Economics, Working Papers 066, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Catherine L. Mann, 2002. "Perspectives on the U.S. Current Account Deficit and Sustainability," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 131-152, Summer.
- Bernard Salanié, 1999.
"Guide pratique des séries non stationnaires,"
99-23, Centre de Recherche en Economie et Statistique.
- Finn E. Kydland & Carlos E.J.M. Zarazaga, 2003. "Argentina's lost decade and subsequent recovery: hits and misses of the neoclassical growth model," Center for Latin America Working Papers 0403, Federal Reserve Bank of Dallas.
- Bharat Trehan & Carl E. Walsh, 1988.
"Testing intertemporal budget constraints: theory and applications to U. S. federal budget and current account deficits,"
Working Papers in Applied Economic Theory
88-03, Federal Reserve Bank of San Francisco.
- Trehan, Bharat & Walsh, Carl E, 1991. "Testing Intertemporal Budget Constraints: Theory and Applications to U.S. Federal Budget and Current Account Deficits," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 206-23, May.
- Greenwood, Jeremy, 1983. "Expectations, the exchange rate, and the current account," Journal of Monetary Economics, Elsevier, vol. 12(4), pages 543-569, November.
- Paul Cashin & Christopher J. Kent, 2003. "The Response of the Current Account to Terms of Trade Shocks: Persistence Matters," IMF Working Papers 03/143, International Monetary Fund.
- Sheffrin, Steven M. & Woo, Wing Thye, 1990. "Testing an optimizing model of the current account via the consumption function," Journal of International Money and Finance, Elsevier, vol. 9(2), pages 220-233, June.
- Huang, Chao-Hsi & Lin, Kenneth S., 1993. "Deficits, government expenditures, and tax smoothing in the United States: 1929-1988," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 317-339, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valeria Dowding).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.