Record Details

Intertemporal modeling of the current account

Turkish Economic Review

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Field Value
 
Title Intertemporal modeling of the current account
 
Creator GHASSAN, Hassan Belkacem; Umm Al-Qura University, Department of Economics
DRISSI, Ramzi;

Department of Economics, Carthage University. Tunisia. ramzidrissi@yahoo.fr and rdrissi@esg.fr
 
Subject Current account; Consumption; Intertemporal Model; Per-capita GDP; Quasi-elasticity.
E10; E20; F40.
 
Description Abstract. This paper explores the long-run current account to GDP ratio in the present value model framework (PVMCA). Firstly, we use Euler equation at macro level to identify a general equation of the per capita current account to GDP. Secondly, through the overlapping generations model we determine the equation of per-capita CA using relevant variables, and discuss the empirical validity of the PVMCA via the quasi-elasticity of CA-to-GDP with respect to the per capita growth rate of output and consumption. We show that the elasticities of CA-to-GDP to per-capita output and ant to per-capita consumption growths interact in opposite paths, meaning that a higher growth rate of consumption tomorrow involves more saving yesterday and brings up a positive current account balance.Keywords. Current account, Consumption, Intertemporal Model, Per-capita GDP, Quasi-elasticity.JEL. E10, E20, F40.
 
Publisher Turkish Economic Review
Turkish Economic Review
 
Contributor —
 
Date 2019-10-13
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/TER/article/view/1936
10.1453/ter.v6i3.1936
 
Source Turkish Economic Review; Vol 6, No 3 (2019): September; 185-199
Turkish Economic Review; Vol 6, No 3 (2019): September; 185-199
2149-0414
 
Language eng
 
Relation http://www.kspjournals.org/index.php/TER/article/view/1936/1943
 
Rights Copyright (c) 2019 Turkish Economic Review
http://creativecommons.org/licenses/by-nc/4.0