@article{Intertemporal:1303,
      recid = {1303},
      author = {Kano, Takashi},
      title = {A Structural VAR Approach to the Intertemporal Model of  the Current Account},
      publisher = {Bank of Canada},
      address = {2003},
      pages = {1 online resource (v, 33 pages)},
      abstract = {The intertemporal current account approach predicts that  the current account of a small open economy is independent  of global shocks, and that responses of the current account  to country-specific shocks depend on the persistence of the  shocks. The author shows that these predictions impose  cross-equation restrictions (CERS) on a structural vector  autoregression (SVAR). To test the CERs, the author  develops identification schemes of the SVAR that exploit  the orthogonality of the world real interest rate to  country-specific shocks as well as the lack of a long-run  response of net output to transitory shocks. Tests of the  SVAR reveal two puzzling aspects of the Canadian and U.K.  current account: (i) the response of the current account to  a country-specific transitory shock is too large, and (ii)  the fluctuations in the current account are dominated by  country-specific transitory shocks that explain almost none  of the fluctuations in net output growth.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1303},
      doi = {https://doi.org/10.34989/swp-2003-42},
}