Robustness of Macroeconomic Indicators of Capital Mobility

December 1, 1992

Preview Citation

Format: Chicago

Enrique G. Mendoza Robustness of Macroeconomic Indicators of Capital Mobility, (USA: International Monetary Fund, 1992) accessed September 30, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The performance of macroeconomic indicators of capital mobility is examined in the context of an intertemporal equilibrium model of a small open economy. Recursive numerical solution methods are used to compute measures of consumption smoothing, savings-investment correlation, and the variability and output-correlation of investment that characterize the model in the presence of income disturbances. None of these statistics is a reliable indicator of capital mobility unless information regarding differences in preferences, technology, and the nature of stochastic shocks can be taken into account.

Subject: Business cycles, Consumption, Economic growth, External position, Foreign assets, International trade, Labor, National accounts, Trade balance

Keywords: Balance of trade, Business cycles, Capital mobility, Consumption, Consumption variability, Foreign assets, Foreign assets, Immobile capital, Investment variability, Open economy, Savings plan, Savings-investment correlation, Standard deviation, Trade balance, WP

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/111
Stock No:

WPIEA1111992
ISBN:

9781451853391
ISSN:

1018-5941

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