How sustainable are OECD current account balances in the long-run?

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 techni...

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Main Author: Mark J. Holmes
Format: Default Preprint
Published: 2003
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Online Access:https://hdl.handle.net/2134/353
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spelling rr-article-94934962003-01-01T00:00:00Z How sustainable are OECD current account balances in the long-run? Mark J. Holmes (1668373) Other economics not elsewhere classified OECD current account unit root cointegration panel data Economics not elsewhere classified 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. 2003-01-01T00:00:00Z Text Preprint 2134/353 https://figshare.com/articles/preprint/How_sustainable_are_OECD_current_account_balances_in_the_long-run_/9493496 CC BY-NC-ND 4.0
institution Loughborough University
collection Figshare
topic Other economics not elsewhere classified
OECD
current account
unit root
cointegration
panel data
Economics not elsewhere classified
spellingShingle Other economics not elsewhere classified
OECD
current account
unit root
cointegration
panel data
Economics not elsewhere classified
Mark J. Holmes
How sustainable are OECD current account balances in the long-run?
description 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.
format Default
Preprint
author Mark J. Holmes
author_facet Mark J. Holmes
author_sort Mark J. Holmes (1668373)
title How sustainable are OECD current account balances in the long-run?
title_short How sustainable are OECD current account balances in the long-run?
title_full How sustainable are OECD current account balances in the long-run?
title_fullStr How sustainable are OECD current account balances in the long-run?
title_full_unstemmed How sustainable are OECD current account balances in the long-run?
title_sort how sustainable are oecd current account balances in the long-run?
publishDate 2003
url https://hdl.handle.net/2134/353
_version_ 1794755299207282688