Deregulation and the Current Account

Arbeitspapier

We use a dynamic general-equilibrium model to study how removing barriers to competition in the nontraded goods sector affects the current account of a small open economy. We show that the expansion of the nontraded sector that results from such a "deregulation shock" is associated with an accumulation of foreign assets unless the production of nontraded goods is very capital-intensive. We then investigate whether a measure of domestic deregulation does, in fact, help to explain countries' current account balances in recent decades, and find some empirical support for the model's predictions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 02.07

Classification and Topics

• Classification: Wirtschaft ; Open Economy Macroeconomics ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Current Account Adjustment; Short-term Capital Movements
• Subject: International macroeconomics ; nontraded goods ; current account ; deregulation ; imperfect competition ; Deregulierung ; Nicht-handelbare Güter ; Unvollkommener Wettbewerb ; Kleine offene Volkswirtschaft ; Wirtschaftliche Anpassung ; Leistungsbilanz ; Kaufkraftparität ; Reallohn ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harms, Philipp
• Event: Veröffentlichung
• (who): Swiss National Bank, Study Center Gerzensee
• (where): Gerzensee
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/128014
• Last update: 10.03.20252025, 11:42 AM CET