Year: 1998
Author: Schimmelpfennig, Axel
Credit and Capital Markets – Kredit und Kapital, Vol. 31 (1998), Iss. 2 : pp. 190–216
Abstract
German Reunification and its Current Account Deficit
The German current account balance has moved from surplus to deficit in the course of unification. A theoretical model for the current account, encompassing the elasticities, the monetary, and the absorptions approach is set up and tested for Germany, using cointegration analysis. In addition, private savings are modelled by a life-cycle model nested in a model of overlapping generations. A country’s private and government savings are identified as the major factors driving the current account. Private savings are explained by the specified model. The concept of a primary deficit as well as the concept of half- and full-debt-cycles are used to argue that the German current account deficit can easily move from sustainability to unsustainability in the near future.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/ccm.31.2.190
Credit and Capital Markets – Kredit und Kapital, Vol. 31 (1998), Iss. 2 : pp. 190–216
Published online: 1998-02
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 27
Author Details
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