Clarida, Goretti, and Taylor find evidence of threshold behavior in current account adjustment for the G7 countries, such that the dynamics of adjustment towards equilibrium depend upon whether the current-account/ net output ratio breaches estimated, country-specific current account surplus or deficit thresholds.

• Position: Conferences - Brief Article

Clarida, Goretti, and Taylor find evidence of threshold behavior in current account adjustment for the G7 countries, such that the dynamics of adjustment towards equilibrium depend upon whether the current-account/ net output ratio breaches estimated, country-specific current account surplus or deficit thresholds. Both the speeds of adjustment and the size of the thresholds differ significantly...