Lanzafame, Matteo (2012): Current account sustainability in advanced economies.
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This paper investigates the sustainability of current accounts in advanced economies, using a panel of 27 countries and annual data over the 1980-2008 period. We find strong evidence in favour of nonlinear but stationary current-account trajectories for 14 countries, while the remaining 13 appear to be nonstationary and, thus, unsustainable. Our analysis indicates that careful empirical modeling of current-account dynamics, particularly in relation to cross-section dependence and nonlinear behaviour, is crucial for appropriate economic policymaking.
|Item Type:||MPRA Paper|
|Original Title:||Current account sustainability in advanced economies|
|Keywords:||Current account sustainability; panel unit root tests; nonlinearity|
|Subjects:||C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C33 - Models with Panel Data; Longitudinal Data; Spatial Time Series|
|Depositing User:||Matteo Lanzafame|
|Date Deposited:||05. Nov 2012 05:09|
|Last Modified:||12. Feb 2013 14:48|
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