Endogenous discounting, the world saving glut and the U.S. current account

Journal of International Economics

Volumn 75, Issue 1, 2008, Pages 30-53

  Choi, Horag ^a   Mark, Nelson C ^b   Sul, Donggyu ^a  

^a UNIVERSITY OF AUCKLAND   (New Zealand)

^b UNIVERSITY OF NOTRE DAME   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

NUMERICAL MODEL; PARAMETERIZATION; SAVINGS; STOCHASTICITY; VECTOR;

NORTH AMERICA; UNITED STATES;

EID: 43049174606     PISSN: 00221996     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jinteco.2007.11.001     Document Type: Article

References (40)

1. Attanasio O.P. Cohort analysis of saving behavior by U.S. households. The Journal of Human Resources 33 3 (1998) 575-609 Summer
2. Backus D.K., Kehoe P.J., and Kydland F.E. International real business cycles. Journal of Political Economy 4 (1992) 745-777
3. Baxter M., and Crucini M.J. Business cycles and the asset structure of foreign trade. International Economic Review 36 (1995) 821-854
4. Bergin P.R. How well can the new open economy macroeconomics explain the exchange rate and the current account?. Journal of International Money and Finance 25 5 (2006) 675-701 August
5. Bergin P.R., and Sheffrin S.M. Interest rates, exchange rates, present value models of the current account. Economic Journal 110 463 (2000) 535-558 April
6. Bernanke B.S. Remarks by Governor Ben S. Bernanke at the Sandridge Lecture, Virginia Association of Economics, Richmond, Virginia (2005). http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm
7. Bernheim B.D., Skinner J., and Weinberg S. What accounts for the variation in retirement wealth among U.S. households?. American Economic Review 91 4 (2001) 832-857 September
8. Bian Y., and Meng Q. Preferences, endogenous discount rate, and indeterminacy in a small open economy model. Economics Letters 84 3 (2004) 315-322 September
9. Blanchard O., Giavazzi F., and Sa F. The U.S. current account and the dollar. NBER working paper No. 11137 (2005)
10. Bosworth B., Burtless G., and Sabelhaus J. The decline in saving: evidence from household surveys. Brookings Papers on Economic Activity 1991 1 (1991) 183-256
11. Bussière M., Fratzscher M., and Müller G.J. Productivity shocks, budget deficits and the current account. European Central Bank Working Paper No. 509 (2005)
12. Carroll C.D. Buffer-stock saving and the life cycle/permanent income hypothesis. Quarterly Journal of Economics 92 (1997) 1-55
13. Carroll C.D. A theory of the consumption function with and without liquidity constraints. Journal of Economic Perspectives 15 (2001) 23-45
14. Carroll C.D. (2004), Theoretical Foundations of Buffer-Stock Saving, mimeo, Johns Hopkins University.
15. Chinn M.D., and Ito H. Current account balances, financial development and institutions: assaying the world 'savings glut'. NBER working paper No. 11761 (2005)
16. Chinn M.D., and Prasad E.S. Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration. Journal of International Economics 59 1 (2003) 47-76 January
17. Corsetti G., and Müller G.J. Twin deficits: squaring theory, evidence and common sense. Economic Policy 21 48 (2006) 597-638 October
18. Domeij D., and Floden M. Population aging and international capital flows. International Economic Review 47 (2006) 1013-1032
19. Dooley M.P., Folkerts-Landau D., and Garber P.M. The U.S. current account deficit and economic development: collateral for a total return swap. NBER working paper No. 10727 (2004)
20. Dooley M.P., Folkerts-Landau D., and Garber P.M. Savings gluts and interest: the missing link to Europe. NBER working paper No. 11520 (2005)
21. Edwards S. Is the U.S. current account deficit sustainable? And if not, how costly is adjustment likely to be?. Brookings Papers on Economic Activity 1 (2005) 211-288
22. Engel Charles., and Rogers J.H. The U.S. current account deficit and the expected share of world output. Journal of Monetary Economics 53 5 (2006) 1063-1093 July
23. Faruqee H., Laxton D., Muir D., and Pesenti P. Smooth landing or crash? Model-based scenarios of global current account rebalancing. NBER Working Paper No. 11583 (2005)
24. Ghironi F., İşcan T.B., and Rebucci A. Net foreign asset positions and consumption dynamics in the international economy. International Monetary Fund Working Paper WP/05/82 (2005)
25. Gokhale J., Kotlikoff l.J., and Sabelhaus J. Understanding the post-war decline in U.S. saving: a cohort analysis. Brookings Papers on Economic Activity 1 (1996) 315-390
26. Gourinchas P.O., and Rey H. From world banker to world venture capitalist: the U.S. external adjustment and the exorbitant privilege. NBER working paper No. 11563 (2005)
27. Granger C.W.J., and Newbold P. Spurious regressions in economics. Journal of Econometrics 2 2 (1974) 111-120 July
28. Gruber J.W., and Kamin S.B. Explaining the global pattern of current account imbalances. Board of Governors of the Federal Reserve System International Finance Discussion Paper No. 846 (2005)
29. Kim S., and Ayhan Kose M. Dynamics of open-economy business-cycle models: role of the discount factor. Macroeconomic Dynamics 7 2 (2003) 263-290 April
30. Mann C.L. Is the U.S. Trade Deficit Sustainable? (1999), Institute for International Economics, Washington D.C.
31. Mendoza E. Real business cycles in a small-open economy. American Economic Review 81 4 (1991) 797-818 September
32. Meng Q. Impatience and equilibrium indeterminacy. Journal of Economic Dynamics & Control 30 12 (2006) 2671-2692 December
33. Nason J., and Rogers J.H. The present-value model of the current account has been rejected: round up the usual suspects. Journal of International Economics 86 1 (2006) 159-187 January
34. Obstfeld M. Aggregate spending and the terms of trade: Is there a Laursen-Metzler effect?. Quarterly Journal of Economics 97 2 (1982) 251-270 May
35. Obstfeld M., and Rogoff K. The unsustainable US current account position revisited. NBER working paper No. 10869 (2004)
36. Park J.Y. Testing for unit roots and cointegration by variable addition. In: Fomby T.B., and Rhodes Jr. G.F. (Eds). Co-integration, spurious regressions, and unit roots. Advances in Econometrics series vol. 8 (1990), JAI Press, London 107-133
37. Schmitt-Grohé S. The international transmission of economic fluctuations: effects of U.S. business cycles on the Canadian economy. Journal of International Economics 44 2 (1998) 257-287 April
38. Schmitt-Grohé S., and Uribe M. Closing small open economy models. Journal of International Economics 61 (2003) 163-185
39. Summers L., Carroll C., and Blinder A.S. Why is U.S. national saving so low?. Brookings Papers on Economic Activity 2 (1987) 607-642
40. Yi K.-M. Can government purchases explain the recent U.S. net export deficits?. Journal of International Economics 35 (1993) 201-225