Can government spending shock capture net export information

[jpfeifer]

See

Closed economy data correspondance

I think this is ultimately a question you will need to answer for yourself, although I do not believe it is typical for authors to remove net exports when dealing with US data (see e.g. Smets and Wouters (2007) or Schmitt-Grohe and Uribe (2012)). My guess is this convention exists because the current account is a comparatively small component of aggregate output, and hence the bias introduced by failing to account for it is “small”. If you were considering a country where the CA was a large perc…

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