Interest Rates , Exchange Rates and Present Value Models of the Current Account

  title={Interest Rates , Exchange Rates and Present Value Models of the Current Account},
  author={Paul R. Bergin and Steven M. Sheffrin}
  • Paul R. Bergin, Steven M. Sheffrin
This paper develops a testable intertemporal model of the current account that allows for variable interest rates and exchange rates. These additional variables are channels through which external shocks may in ̄uence the domestic current account. The restrictions from the theoretical model are subjected to present value tests using quarterly data from three small open economies. The paper ®nds that including the interest rate and exchange rate improves the ®t of the intertemporal model over… CONTINUE READING
Highly Cited
This paper has 50 citations. REVIEW CITATIONS

From This Paper

Figures, tables, and topics from this paper.


Publications citing this paper.

fewer than 50 Citations

Citations per Year
Semantic Scholar estimates that this publication has 50 citations based on the available data.

See our FAQ for additional information.


Publications referenced by this paper.
Showing 1-10 of 24 references

`The dividend-price ratio and expectations of future dividends and discount factors.

  • J. Y. Campbell, R. Shiller
  • The Review of Financial Studies,
  • 1989
Highly Influential
6 Excerpts

`De®cits, government expenditures, and tax smoothing in the United States: 1929±1988.

  • C. Huang, K. Lin
  • Journal of Monetary Economics,
  • 1993
Highly Influential
6 Excerpts

`Real interest rates, home goods and optimal external borrowing.

  • R. Dornbusch
  • Journal of Political Economy,vol. 91,
  • 1983
Highly Influential
6 Excerpts

`Traded goods consumption smoothing and the random walk behavior of the real exchange rate.

  • K. Rogoff
  • Bank of Japan Monetary and Economic Studies,
  • 1992
Highly Influential
2 Excerpts

Similar Papers

Loading similar papers…