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The corporate sector and the current account

Author

Listed:
  • Jan Behringer
  • Till van Treeck

Abstract

We analyze how the corporate sector’s financing position affects national current account balances in a macroeconomic panel analysis for sample of 25 countries for the period 1980–2015. A consistent finding is that an increase (decrease) in corporate net lending is associated with a higher (lower) current account. We disentangle the current account effects of corporate saving and investment and conduct a number of robustness checks. We show that corporate saving and top household income shares are inversely related in our sample and that they have opposite effects on the current account. We conclude that corporate sector saving has contributed considerably to global current account imbalances.

Suggested Citation

  • Jan Behringer & Till van Treeck, 2023. "The corporate sector and the current account," Oxford Economic Papers, Oxford University Press, vol. 75(3), pages 826-857.
    • Handle: RePEc:oup:oxecpp:v:75:y:2023:i:3:p:826-857.
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    File URL: http://hdl.handle.net/10.1093/oep/gpac036
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    Cited by:

    1. is not listed on IDEAS
    2. Jan Behringer, 2019. "Factor shares and the rise in corporate net lending," IMK Working Paper 202-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    3. Jan Behringer, 2019. "Factor shares and the rise in corporate net lending," IMK Working Paper 202-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    4. Jan Behringer & Till van Treeck & Achim Truger, 2020. "How to reduce Germany's current account surplus?," Working Papers 8, Forum New Economy.

    More about this item

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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