IDEAS home Printed from https://ideas.repec.org/p/snb/snbwpa/2025-08.html
   My bibliography  Save this paper

Granularity in the current account

Author

Listed:
  • Miriam Koomen
  • Laurence Wicht

Abstract

We present new empirical evidence on the role of granularity in the current account (CA), using a unique and comprehensive firm-level dataset for Switzerland. We show that idiosyncratic shocks to large firms account for almost two thirds of the fluctuations in the headline CA and are the primary source of CA volatility. The granular effect is present across goods, services, and income components and persists over both short- and medium-term horizons. In addition to their direct impact, idiosyncratic shocks propagate through inter-firm linkages via input-output relationships and cross-product connections associated with multinational enterprise activity. Our findings challenge standard macroeconomic models that emphasize aggregate fundamentals, highlighting the importance of firm-level heterogeneity in explaining external imbalances and their fluctuations.

Suggested Citation

  • Miriam Koomen & Laurence Wicht, 2025. "Granularity in the current account," Working Papers 2025-08, Swiss National Bank.
    • Handle: RePEc:snb:snbwpa:2025-08
    as

    Download full text from publisher

    File URL: https://www.snb.ch/en/publications/research/working-papers/2025/working_paper_2025_08
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Current account; Firm-level shocks; Granular fluctuations; Large firms;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:snb:snbwpa:2025-08. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Enzo Rossi (email available below). General contact details of provider: https://edirc.repec.org/data/snbgvch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.