TY  - JOUR
AU  - Clarida, Richard H
AU  - Goretti, Manuela
AU  - Taylor, Mark P
TI  - Are There Thresholds of Current Account Adjustment in the G7?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12193
PY  - 2006
Y2  - May 2006
DO  - 10.3386/w12193
UR  - http://www.nber.org/papers/w12193
L1  - http://www.nber.org/papers/w12193.pdf
N1  - Author contact info:
Richard H. Clarida
Columbia University
420 West 118th Street
Room 1111, IAB
New York, NY  10027
Tel: 212/854-3676
Fax: 212/854-8059
E-Mail: rhc2@columbia.edu

Manuela Goretti
University of Warwick
Economics Department
CV4 7AL Coventry UK
E-Mail: M.Goretti@warwick.ac.uk

Mark P. Taylor
Office of the Dean
Warwick Business School
University of Warwick
Coventry CV4 7AL
UNITED KINGDOM
E-Mail: mark.taylor@warwick.ac.uk
M1  - published as Richard H. Clarida, Manuela Goretti, Mark P. Taylor. "Are There Thresholds of Current Account Adjustment in the G7?," in Richard H. Clarida, editor, "G7 Current Account Imbalances: Sustainability and Adjustment" University of Chicago Press (2007)

AB  - We find evidence of threshold behavior in current account adjustment for the G7 countries, such that the dynamics of adjustment towards equilibrium depend upon whether the current-account/ net-output ratio breaches estimated, country specific current account surplus or deficit thresholds. Both the speeds of adjustment and the size of the thresholds are found to differ significantly across countries. In addition, we also find evidence of shifts in means and variances of exchange rate changes, stock returns, and interest differentials that coincide with the current account adjustment regimes identified by the model.
ER  -