Provide your answers to the questions in a short write-up. Provide some brief background about the impact of the Bretton Woods Agreement and its abandonment in 1971-3, the Plaza Accords of 1985, and any other major policies, events or trends affecting the evolution of the current account over the years covered in these estimations. Briefly discuss how your results fit with that background information.
Is the US current account deficit stationary over time? To answer this question, we will use Unit Root tests. Go to FRED, and download the series “Balance on current account, NIPA’s” as well as the series “Gross Domestic Product, Quarterly, Seasonally Adjusted Annual Rate” symbol GDP. Import the data from Excel into your econometric software. […]