This study is based on the viewpoint of the intertemporal substitution of the consumption smoothing. Under considering the interactive influences on the international economy, the writer employs the present value model to investigate an estimated model of the current accounts.
The basis of the traditional current account model is to apply the traditional single-country VAR estimation, and not to consider the internationally interactive effects among countries. However, with the more and more frequent interactions among nations, the economic development in different countries, for the aspect of economic theory, may have interactive influences on each other. Respecting this viewpoint that the current account theory of the traditionally intertemporal model are actually unable to effectively support the inference of the model, the writer therefore adds the cross-country VAR estimation method analyze the transnational influences. I hope that the model can effectively modify the estimation index for the conventional model. In addition, a good model not only should contain in-sample goodness of fit, but also could reveal the variables of the future by using the out-of-sample. Therefore, according to the method of predictive capability assessment proposed by Diebold and Mariano (1995), I attempt to compare the out-of-sample prediction between the single and the cross-country VAR.
From the aspect of the goodness of fit, the finding of this study has proven that the model considered the cross-country VAR indeed has a relatively better goodness-of-fit result in Japan, if compared to the traditional single-country. However, in the U.S., the traditional single-country model does not immensely improve the goodness-of-fit result. The finding shows that either the traditional single-country VAR or cross-country VAR, it possesses the perfect goodness of fit. The reason, perhaps, is that America itself has already been the center of the politics and economy. Also, it seems those Americans representative households have as well as the worldview. Therefore, people in the States might have considered the economic conditions of other countries when they are engaged in consumption behaviors. If this is the case, there are no many opportunities for those people to adjust their behaviors when considering the foreign economic situations. On the other hand, from the viewpoint of the prediction capability, the final result conducted both in the U.S. and in Japan agreeably demonstrates that it is a better method of prediction using the cross-country VAR estimation than the traditional single-country one.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0116107-220023 |
| Date | 16 January 2007 |
| Creators | Tseng, Ming-te |
| Contributors | Ching-nun Lee, Ming-jang Weng, Yung-hsiang Ying |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0116107-220023 |
| Rights | unrestricted, Copyright information available at source archive |
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