Title: Current account model with rational expectations and Bayesian learning

Authors: Christopher Dylan McGee

Addresses: Department of Economics and Global Studies, Assumption College, 500 Salisbury St, Worcester MA 01609, USA

Abstract: The article presents a long-term macro-model of the US trade balance that allows for agents with rational expectations to learn about the key parameters affecting the currency forecast. This allows for a dynamic that is a plausible middle-ground between the standard alternatives of either perfect information or investor myopia.

Keywords: Bayesian learning; current account; macromodelling; US trade balance; USA; United States; currency forecast.

DOI: 10.1504/IJEBR.2009.024308

International Journal of Economics and Business Research, 2009 Vol.1 No.3, pp.333 - 346

Published online: 31 Mar 2009 *

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