Macroeconomic variables and current account balance in Namibia

Eita, Joel Hinaunye and Manuel, Victoria and Naimhwaka, Erwin (2018): Macroeconomic variables and current account balance in Namibia.

Abstract

This paper investigates macroeconomic determinants of the current account balance in Namibia. The results show that there is evidence of twin deficit hypothesis in Namibia. Evidence of twin deficit hypothesis suggest that it is important for Namibia to have fiscal discipline in order to improve its current account. Increase in capital flows, real GDP or per capita, results in a deterioration of the current account. Increase in interest rate, commodity prices and population cause the current account balance to improve. This suggest that contractionary monetary policy contributed to reduction of unproductive imports and improved the current account balance.

• Item Type: MPRA Paper
• Language: English
• Keywords: current account, balance of payments, cointegration, Namibia
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C19 - Other; F - International Economics > F3 - International Finance; F - International Economics > F3 - International Finance > F30 - General; F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements

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