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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page Modeling the IMF's Statistical Discrepancy in the Global Current Account
Jaime Marquez; Lisa Workman
2000-678  (September 2000)

Abstract:  This paper offers a framework for judging when the discrepancy embodied in current-account forecasts is large. The first step in implementing this framework involves developing an econometric model explaining the components of the aggregate discrepancy, estimating the associated parameters, and generating the aggregate discrepancy's conditional expectation. The second step is to compare this model-based forecast with the discrepancy embodied in countries' current-account forecasts. If the gap in discrepancies is below a critical value, then the discrepancy embodied in the countries' current-account forecasts is not large. Otherwise, the discrepancy is large and calls for a careful re-examination of the associated current-account forecasts.

Full paper (303 KB PDF)

Keywords
FIML, forecast uncertainty, global discrepancies, IMF

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Last update: July 19, 2001