ASIAN CURRENT ACCOUNT BALANCES AND SPILLOVERS FROM A FOREIGN COUNTRY, A REGION AND THE UNITED STATES

Authors

Seema Wati Narayan, Royal Melbourne Institute of Technology University, AustraliaFollow

Document Type

Article

Abstract

This paper provides an overall picture on the influence of domestic and foreign shocks on the current account of selected Asian countries over the period 1978 to 2012. The present value model of the current account theory states that forward looking and consumption smoothing behaviour of economic agents can promote sustainable current account balances, as long as these are maintained by transitory unanticipated shocks to the current account. The unexpected transitory domestic and foreign shocks are sourced, respectively, from the domestic and foreign current account. Foreign shocks are developed from an Asian country, a region, and the US. Our empirical analysis of the impact of foreign and domestic current account shocks shows that unexpected domestic shocks, rather than unexpected foreign shocks, matter for the current accounts of Asian countries.

Recommended Citation

Narayan, Seema Wati (2020) "ASIAN CURRENT ACCOUNT BALANCES AND SPILLOVERS FROM A FOREIGN COUNTRY, A REGION AND THE UNITED STATES," Bulletin of Monetary Economics and Banking: Vol. 23: No. 1, Article 3.
DOI: https://doi.org/10.21098/bemp.v23i1.1207
Available at: https://bulletin.bmeb-bi.org/bmeb/vol23/iss1/3

First Page

1

Last Page

24

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Australia

Affiliation

Royal Melbourne Institute of Technology University