The Intertemporal Approach to the Current Account: Evidence for Chile
Abstract
This paper studies the existence of "excess" current-account imbalances in Chile in the 1960-1999 period. This phenomenon is modelled using present value tests that allow for variable interest rates and exchange rate fluctuations. Despite its simplicity, most of the observed imbalances in the current account are accounted for by the model. Results suggest that using models where agents behave as forward-looking rational agents, is a valid framework. Moreover, the analysis highlights the rel-evance of variable interest rates and exchange rates. Results also imply that capital controls, that were widely used in the period under study, were not effective.
How to Cite
Salas Landeau, S. A. (1). The Intertemporal Approach to the Current Account: Evidence for Chile. Economic Analysis Review, 17(2), 95-121. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/20
Issue
Section
Articles
Upon submission of an article, authors are asked to indicate their agreement to abide by an open-access license. The license permits any user to download, print out, extract, archive, and distribute the article, so long as appropriate credit is given to the authors of the work. The license ensures that your article will be as widely available as possible and that your article can be included in any scientific archive. Please read about the Creative Commons Attribution License before submitting your paper.
Except where otherwise noted, content on this site is licensed under a Creative Commons Attribution 3.0 License
