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Current account adjustment : some new theory and evidence / Jiandong Ju, Shang-Jin Wei

Author
Ju, Jiandong
Published
Cambridge, Mass. : National Bureau of Economic Research, [2007]
Copyright Date
©2007
Physical Description
61 pages : illustrations ; 22 cm.
Additional Creators
Wei, Shang-Jin and National Bureau of Economic Research
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Summary
This paper aims to provide a theory of current account adjustment that generalizes the textbook version of the intertemporal approach to current account and places domestic labor market institutions at the center stage. In general, in response to a shock, an economy adjusts through a combination of a change in the composition of goods trade (i.e., intra-temporal trade channel) and a change in the current account (i.e., intertemporal trade channel). The more rigid the labor market, the slower the speed of adjustment of the current account towards its long-run equilibrium. Three pieces of evidence are provided that are consistent with the theory.
Subject(s)
Note
"September 2007."
Bibliography Note
Includes bibliographical references (pages 42-45).
Other Forms
Also available in PDF from the NBER world wide web site (www.nber.org).
View MARC record | catkey: 4046056