1
$\begingroup$

In Mian, Sufi and Verner (2017), the authors look at the impact of an increase in household debt on both net exports and the current account, and find a significant negative coefficient in the regression specification employed (see Table V).

Why would you look at both the current account and net exports? Wouldn't net exports be the only item of interest in the current account? Why would one care about the impact on transfers, for instance? I wonder about this further, because they don't include the current account in their working paper version here.

$\endgroup$
1
$\begingroup$

Indeed, their theory relates primarily household debt to net exports. This is the main focus of their working paper. However, as a referee, I would try to find out more and ask whether the change in net exports comes from imports or exports, or whether household indebtedness could also affect international transfers. A household may use debt to invest abroad and get dividends and interests in return. Are there no other margins that could be affected? This type of request is quite common from referees and may explain the differences between the working paper and the final version.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.