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A New Way of Thinking about the Current Account

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  • Fisher, Eric O'N

Abstract

Extending the theory of generational accounts, the author shows that the conventional current account is not related to the real effects of a country's fiscal policy. For any international array of fiscal policies, a country can implement its own policy so that the conventional government and current account deficits are zero in every period. The author argues that economists should develop a new measure of the current account. This measure is forward looking and keeps track of expected transfers between countries. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Fisher, Eric O'N, 1995. "A New Way of Thinking about the Current Account," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(3), pages 555-568, August.
  • Handle: RePEc:ier:iecrev:v:36:y:1995:i:3:p:555-68
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    Cited by:

    1. repec:red:issued:17-49 is not listed on IDEAS
    2. Camarero, Mariam & Carrion-i-Silvestre, Josep Lluís & Tamarit, Cecilio, 2013. "Global imbalances and the intertemporal external budget constraint: A multicointegration approach," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5357-5372.
    3. Neaime, Simon & Gaysset, Isabelle, 2017. "Sustainability of macroeconomic policies in selected MENA countries: Post financial and debt crises," Research in International Business and Finance, Elsevier, vol. 40(C), pages 129-140.
    4. Scott Austin, 2000. "Alternative Measures of Australia’s External Indebtedness," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 7(2), pages 141-154.
    5. Eric O'N. Fisher, 1998. "A Measure of the Current Account Related to the Well-Being of Japan: Generational Accounts in the Open Economy," NBER Chapters,in: Geography and Ownership as Bases for Economic Accounting, pages 315-334 National Bureau of Economic Research, Inc.
    6. Hsiao-chuan Chang, 2004. "Budget Balance And Trade Balance:Kin Or Strangers. A Case Study Of Taiwan," Department of Economics - Working Papers Series 893, The University of Melbourne.
    7. Eric O'N. Fisher & YoungSoo Woo, 1994. "A New Meaure of the Korean Current Account," International Finance 9411001, EconWPA.
    8. Juann Hung & Susan Charrette, 1997. "The Looming U.S. External Debt: How Serious Is It?," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 32-41, July.
    9. Christian vom Lehn & Eric Fisher & Aspen Gorry, 2018. "Male Labor Supply and Generational Fiscal Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 121-149, April.
    10. Scott Austin, 2001. "Alternative Measures of Australia’s External Indebtedness," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 8(2), pages 141-154.

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