Resource title

Reviewing the sustainability/stationarity of current account imbalances with tests for bounded integration

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Resource description

We investigate for 26 OECD economies if their current account imbalances are driven by stochastic trends. Standard ADF results are contrasted with tests accounting for the bounded support of the current account. Neglecting the latter feature might give misleading results in the sense that ADF based conclusions are biased towards the rejection of unit root features. The current account imbalances are found to be bounded nonstationary for most OECD economies. Panel based test statistics confirm the bounded nonstationarity for these series.

Resource author

Helmut Herwartz, Fang Xu

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22012

Resource license

Adapt according to the presented license agreement and reference the original author.