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Christian-Albrechts-Universität Kiel (CAU) >
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Economics Working Papers, Department of Economics, CAU Kiel >
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http://hdl.handle.net/10419/22012
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| Title: | | Reviewing the sustainability/stationarity of current account imbalances with tests for bounded integration  |
| Authors: | | Herwartz, Helmut Xu, Fang |
| Issue Date: | | 2006 |
| Series/Report no.: | | Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2006,07 |
| Abstract: | | 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. |
| Subjects: | | Current account bounded unit root tests |
| JEL: | | F32 E22 E21 C23 C22 C12 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Economics Working Papers, Department of Economics, CAU Kiel
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