This divergence in cyclical strength was accompanied for  BIS Review 16/2000  4  several years during this episode by a persistent appreciation of the dollar, further contributing to a deterioration in the current account.
However, the more serious problem with the application of the conventional framework is the failure to account for structural change, specifically a decline in the non-accelerating inflation rate of unemployment (NAIRU) and an increase in trend growth. The decline in the NAIRU, for example, would raise the equilibrium level of output and increase imports, worsening the current account balance.