Slides for Chapter 5:

Uncertainty and the Current Account

International Macroeconomics

Schmitt-Grohé Uribe Woodford

Columbia University

May 1, 2016

1
International Macroeconomics, Chapter 5 Schmitt-Grohé, Uribe, Woodford

Real Per Capita U.S. GDP Growth 1947Q2-2015Q4

4 1 2 1 2
yt yt
std ln yt−1 = 0.012 std ln yt−1 = 0.006
3

2
2

1
yt−1
yt
1
100 × ln

−1

−2 ← 1984

−3
1950 1960 1970 1980 1990 2000 2010
Year

2
International Macroeconomics, Chapter 5 Schmitt-Grohé, Uribe, Woodford

U.S. Current Account To GDP Ratio 1947Q1-2015Q4

4
1 2 1 2
cat cat
3 mean yt = 0.004 mean yt = -0.03
2

0
2

−1
cat
yt
1
100 ×

−2

−3

−4

−5

−6 ← 1984
−7
1950 1960 1970 1980 1990 2000 2010
Year

3
International Macroeconomics, Chapter 5 Schmitt-Grohé, Uribe, Woodford

U.S. Summary Statistics

Statistic 1947Q1-1983Q4 1984Q1-2015Q4

Std. Dev. Output Growth 1.2% 0.6%
Average CA/GDP 0.4% -2.8%

4
International Macroeconomics, Chapter 5 Schmitt-Grohé, Uribe, Woodford

The Great Contraction of 2008 And The Current Account

−2

−2.5

−3

−3.5
Percent of GDP

−4

−4.5

−5

−5.5
U.S. CA/GDP Ratio
Beginning of Great Contraction
−6
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year

Data Source: www.bea.gov