Prague Economic Papers 2016, 25(6):742-753 | DOI: 10.18267/j.pep.585

Current Account, Consumption and Capital Mobility: An Econometric Approach

Václava Pánková
University of Economics, Prague, Czech Republic (pankova@vse.cz)

This paper is an application of the consumption-smoothing current account theory the main principles of which appeared in the 1980s and gradually broadened to describe the intertemporal dynamics of important economic processes. In open economies, the consumption-smoothing current account process is related to the consumption behaviour of households. The effect on consumption choices and the current account is derived from the premise that households adjust their consumption expenditures according to the terms of trade. The process can be treated in an optimizing framework and originally was strictly connected to the permanent income hypothesis (PIH) and no restrictions to capital mobility. Both assumptions were successively relaxed and relationships allowing incorporation of the excess sensitivity hypothesis (ESH) and not perfect capital mobility have been introduced. Transformed into a VAR model with current account and national cash flow increments as endogenous variables, relevant conclusions are drawn on the basis of Granger causality, the equivalence of the current and predicted current account and an analysis of parameters of the model. Basic relationships and solutions are summarized and an application using the economies of the Czech Republic, Slovakia and Austria follows.

Klíčová slova: current account, permanent income hypothesis, excess sensitivity hypothesis, capital mobility, VAR model
JEL classification: C30, E20, F21, F32

Zveřejněno online: 20. květen 2016; Zveřejněno: 1. prosinec 2016  Zobrazit citaci

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Pánková, V. (2016). Current Account, Consumption and Capital Mobility: An Econometric Approach. Prague Economic Papers25(6), 742-753. doi: 10.18267/j.pep.585
Stáhnout citaci

Reference

  1. Adler, J. (2002). The Open Economy Excess Sensitivity Hypothesis: Theory and Swedish Evidence. Economics Working Papers No. 88. Available at: https://gupea.ub.gu.se/bitstream/2077/2816/1/gunwpe0088.pdf
  2. Araujo, J., Poplawski-Ribeiro, B. L. M., Zanna, L. F. (2013). Current Account Norms in Natural Resource Rich and Capital Scarce Economies. IMF Working Paper 13/80. DOI: 10.5089/9781484396032.001. Available at: http://www.imf.org/external/pubs/ft/wp/2013/wp1380.pdf Přejít k původnímu zdroji...
  3. Azariadis, C., Pissarides, C. A. (2004). Unemployment Dynamics with International Capital Mobility. Available at: http://personal.lse.ac.uk/pissarid/papers/AP04.pdf
  4. Campbell, J. Y., Mankiw, N. G. (1990). Permanent Income, Current Income and Consumption. Journal of Business & Economic Statistics, 8(3), 265-279. DOI: 10.2307/1391964. Přejít k původnímu zdroji...
  5. Feldstein, M., Horioka, C. (1980). Domestic Saving and International Capital Flows. Economic Journal, 90(358), 314-329. DOI: 10.2307/2231790. Přejít k původnímu zdroji...
  6. Flavin, M. A. (1981). The Adjustment of Consumption to Changing Expectations about Future Income. The Journal of Political Economy, 89(5), 974-1009. DOI: 10.1086/261016. Přejít k původnímu zdroji...
  7. Flavin, M. A. (1993). The Excess Smoothness of Consumption: Identification and Interpretation. Review of Economic Studies, 60(3), 651-666. DOI: 10.2307/2298129. Přejít k původnímu zdroji...
  8. Frederick, S., Loewestein, G., O'Donoghue, T. (2002). Time Discounting and Time Preference: A Critical Review. Journal of Economic Literature, 40(2), 351-401. DOI: 10.1257/jel.40.2.351. Přejít k původnímu zdroji...
  9. Gaglianone, W. P. (2004). Current Account and Capital Mobility Hypothesis: Evidence from the G-7. Available at: http://bibliotecadigital.fgv.br/dspace/bitstream/handle/10438/42/1845.pdf;jsessionid=F3DBA15A2DD225A0F9ED38AD01C46A86?sequence=1
  10. Ghosh, A. R. (1995). International Capital Mobility amongst the Major Industrialised Countries: Too Little or Too Much? Economic Journal, 105(428), 107-128. DOI: 10.2307/2235322. Přejít k původnímu zdroji...
  11. Hall, R. E. (1978). Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence. Journal of Political Economy, 86(6), 971-987. DOI: 10.1086/260724. Přejít k původnímu zdroji...
  12. Obstfeld, M., Rogoff, K. (1994). The Intertemporal Approach to the Current Account. NBER Working Paper No. 4893. DOI: 10.3386/w4893. Přejít k původnímu zdroji...
  13. Rakovski, T. (2009). Consumption Smoothing Current Account and International Capital Mobility - Evidence from Time Series and Panel Data. McGill University. Available at: http://digitool.library.mcgill.ca/webclient/StreamGate?folder_id=0&dvs=1385703336096~593
  14. Pánková, V. (2014). Permanent Income Hypothesis in Visegrad Countries, Ekonomie + Management, 17(4), 20-29. Přejít k původnímu zdroji...
  15. Sachs, J. (1982). The Current Account in the Macroeconomic Adjustment Process. Journal of Economics, 84(2), 147-159. DOI: 10.2307/3439631. Přejít k původnímu zdroji...
  16. Younas, J. (2013). Role of Foreign Direct Investment in Estimating Capital Mobility: A Reappraisal of Feldstein-Horioka Puzzle. Available at: http://www.freit.org/WorkingPapers/Papers/ForeignInvestment/FREIT106.pdf

Tento článek je publikován v režimu tzv. otevřeného přístupu k vědeckým informacím (Open Access), který je distribuován pod licencí Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), která umožňuje nekomerční distribuci, reprodukci a změny, pokud je původní dílo řádně ocitováno. Není povolena distribuce, reprodukce nebo změna, která není v souladu s podmínkami této licence.