This result is consistent with consumption externalities resulting from upward-looking comparisons. Moreover, an increase in the corporate financial balance or a decrease in the labour income share leads to an increase in the current account. This finding is consistent with the view that consumers do not fully ‘pierce the corporate veil’. Changes in personal and functional income distribution have contributed considerably to the widening of current account balances.
Working Paper
Income Distribution and the Current Account: A Sectoral Perspective
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Conference paper By
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- D3 Distribution
- D31 Personal Income, Wealth, and Their Distributions
- D33 Factor Income Distribution
- E2 Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
- E21 Macroeconomics: Consumption; Saving; Wealth
- F4 Macroeconomic Aspects of International Trade and Finance
- F41 Open Economy Macroeconomics
- G3 Corporate Finance and Governance