Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 263171
Loughborough University

Loughborough University Institutional Repository

Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/353

Title: How sustainable are OECD current account balances in the long-run?
Authors: Holmes, Mark J.
Keywords: OECD
current account
unit root
cointegration
panel data
Issue Date: 2003
Abstract: The study examines the stationarity and long-run sustainability of OECD current account balances. For this purpose, tests for stationarity and then cointegration between exports and imports are based on recently developed panel data methods that offer increased power over existing time series techniques. Unlike existing panel studies on this topic, this study utilizes techniques that enable the examination of sustainability for individual panel members. The first stage of the investigation relies on a novel approach to unit root testing whereby tests for stationarity are conducted within a seemingly unrelated regression framework. The second stage involves the estimation of the long-run relationship between the exports and imports by a range of recently developed panel data techniques advocated by Pedroni. Using a panel of eleven OECD countries for the study period 1980-2002, the results from these techniques suggest that sustainability is present in six countries at most. Also, sustainability is generally a characteristic of the non-Euro countries. These results can be contrasted with existing group mean unit root and cointegration tests that indicate sustainability for the group as a whole.
Description: Economics Research Paper, no.03-11
URI: https://dspace.lboro.ac.uk/2134/353
Appears in Collections:Working Papers (Economics)

Files associated with this item:

File Description SizeFormat
OECD%2520CAB.pdf216.33 kBAdobe PDFView/Open

 

SFX Query

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.