Impact of Age–Structure Transition on India’s Current Account Balance: An Empirical Analysis

2019 ◽  
Vol 13 (2) ◽  
pp. 208-231
Author(s):  
Aneesha Chitgupi
Keyword(s):  
Current Account ◽  
Age Structure ◽  
Current Account Deficit ◽  
Jel Classification ◽  
Demographic Variables ◽  
Current Account Balance ◽  
Structure Transition ◽  
Working Age ◽  
The Impact ◽  
High Share

This article studies the impact of age structure variables on the current account balance (CAB) by using panel data for 57 countries from 1980 to 2014. The Gudmundsson and Zoega (Economic Letters 123[2]:183–186, 2014) methodology is used to calculate the age-adjusted CAB for these countries and India-specific results are analysed in comparison with Brazil, Russia, China and South Africa. Empirical results show that India’s age-adjusted CAB would have experienced surpluses had it not been for the high share of its dependent population, especially the young. Further, the age-adjustment factor for India shows a gradual decline, and a larger share of working-age population in future may help in reducing its current account deficit (CAD). These results highlight the importance of demographic variables in explaining and predicting changes in the CAB and its implication for the attainment of India’s macroeconomic objective of external stabilisation. JEL Classification: E21, F32, J11

scholarly journals Impact of International Trade and Trade Duties on Current Account Balance of the Balance of Payment: A study of N-11 Countries

2020 ◽  
Vol 6 (1) ◽  
pp. 11-32
Author(s):  
Imtiaz Arif ◽  
Lubna Khan ◽  
Fatima Farooq ◽  
Tahir Suleman
Keyword(s):  
International Trade ◽  
Current Account ◽  
Current Account Deficit ◽  
Unit Root Test ◽  
Future Research ◽  
Current Account Balance ◽  
Test Panel ◽  
Causality Analysis ◽  
Integration Test ◽  
The Impact

This study is aimed to investigate the impact of international trade and trade duties upon the current account balance of the balance of payment of N-11 countries. Two constituents of each factor have been considered for the purpose of analysis. For International trade, import (IMPT) and export (EXPT) of goods and services have been considered whereas, for trade duties, taxes on international trade (TOIT) and customs and other import duties (CID) have been taken as the research variables whereas, current account balance (CAB) has been taken as the dependent variable. For the purpose of analysis panel data of N-11 countries for 27 years from 1990 to 2016 has been tested using different econometric technique such as Panel unit root test, Panel co-integration test, Hausman test, Panel regression analysis and Panel causality analysis. The results demonstrate that overall research variables are co-integrated and having long term relationship and affecting each other in the conventional manner. Notably, it is observed via results that in case of N-11 countries the CAB itself is the regulating factor and all other factors are adjusted according to the movement of CAB. The study provides recommendations for the rectification of current account deficit position and also provides scope for future research as well.

scholarly journals Structural and cyclical factors of Serbia’s current account

2018 ◽  
Vol 63 (217) ◽  
pp. 75-97 ◽  
Author(s):  
Radovan Kovacevic
Keyword(s):  
Current Account ◽  
Structural Changes ◽  
Current Account Deficit ◽  
Current Account Balance ◽  
Full Time ◽  
Structural Factors ◽  
Crisis Period ◽  
The Impact ◽  
The Current Account

This paper examines the impact of structural and cyclical factors on Serbia?s current account. We have applied several filters to turn off the long-term (structural) component and isolate the influence of cyclical factors. In this paper, we show that structural factors were more important determinants of the current account deficit in the full-time sample (1997-2016), while cyclical factors showed a stronger impact in the post-crisis period when the deficit was reduced. Although they lost their intensity during the crisis and in the post-crisis period, the structural factors determine the trend of the current account balance in the long-term. For further improvement of the current account, measures to increase exports should be taken. The structural changes of production, the wider range of support for export financing to small and medium-sized enterprises, and the application of advanced technologies in manufacturing could help to reduce the trade deficit, making the current account deficit sustainable.

scholarly journals Analysis of Current Account Deficit Determinants of Balance of Payments in Fixed and Flexible Exchange Rate Regimes: A Comparative Study in CFA Franc and Non-Franc Zones

2017 ◽  
Vol 3 (3) ◽  
pp. 447
Author(s):  
Remy Hounsou
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
Flexible Exchange Rate ◽  
Balance Of Payments ◽  
Current Account Balance ◽  
Domestic Saving ◽  
Franc Zone ◽  
Financial Variables ◽  
The Impact ◽  
The Current Account

<p><em>This study compares the impact of certain economic and financial variables on the level of the deficit in the current account of the balance of payments of the countries of the Franc zone and certain countries of the non-Franc zone situated south of the Sahara. The empirical results of the study based on panel data models covering the period 1990-2015 indicate that none of the two zones behaves better against the current account deficit of the balance of payments and that no zone is more competitive than the other. Finally, it was clear from our analysis that the variables of gross domestic, saving and the change in the terms of trade better explain the change in the current account balance in the Franc zone, whereas the variables of net foreign transfers and gross domestic saving impact the most the current account deficit in non-CFA zone.</em></p>

scholarly journals The sustainability of Serbia's external position: The impact of fiscal adjustment and external shocks

2015 ◽  
Vol 60 (204) ◽  
pp. 31-60
Author(s):  
Emir Zildzovic
Keyword(s):  
Fiscal Policy ◽  
Current Account ◽  
Current Account Deficit ◽  
Model Averaging ◽  
Current Account Balance ◽  
External Shocks ◽  
Fiscal Adjustment ◽  
External Position ◽  
The Impact ◽  
Averaging Techniques

This paper studies the impact of fiscal policy and external shocks on the sustainability of Serbia?s external position. The key determinants of Serbia's current account balance are identified using model averaging techniques and are compared with estimates obtained for other small open economies (Poland, Georgia, Morocco, Ukraine, and Estonia). The paper uses estimated influences of macrovariables on the current account balance to generate a rich set of possible outcomes for the external position of the country. The results suggest the importance of fiscal policy for the reduction of external imbalances in all countries in our sample. In particular, credible and sustained fiscal adjustment can reduce current account deficit and stabilize Serbia?s external position close to its current level over the medium term. The analysis also warns that lack of success in fiscal consolidation coupled with external shocks may easily push the external position onto an unsustainable path.

THE CURRENT GROWTH EFFECT OF HEALTH TOURISM MARKET DEVELOPMENT IN TURKEY FOR THE EVALUATION ON CURRENT ACCOUNT DEFICIT

2021 ◽  
Vol 6 (11) ◽  
pp. 220-240
Author(s):  
Mustafa IŞIK ◽  
Yakup ÖZSEZER ◽  
Fikriye IŞIK
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
National Income ◽  
Tourism Industry ◽  
Added Value ◽  
Growth Effect ◽  
Critical Threshold ◽  
Current Account Balance ◽  
Health Tourism ◽  
Tourism Sector

Tourism sector is one of the major driving forces to develop the Turkish economy which provides the positive contributions with new employment opportunities and the national income and payments. With aid of this developments in economy by tourism, it has also increased the interaction with alternative areas. Health Tourism is also one of the special areas in which provides to the country high added value and foreign currency exchange income. Since the revenue outcome by health tourism is reaching up to 100 billion dollars, the national policy of health tourism enable countries has been undertaken as a high interested point of investment needed area. The critical threshold of the country’s Gross Domestic Product (GDP) is 4 to 5 percent as a current account balance and this deficient outcome in Turkey mostly takes on 5 to 4 percent which is a considered as a critical threshold. Health Tourism is expected to play a key role in bringing the values to the positive levels and therefore the focus is becoming on this area by health sector. Developing countries such as India, Singapore, and Thailand meet their foreign trade deficits with the income where they have obtained from this specific sector and the level of growth in this sector is at certain rate every year. The health Tourism is very crucial and significant sector for such a country Turkey, who has current budget deficit, and it is real economic sense. With Covid-19 crisis, the plans related with health tourism is re-evaluated by the coordination between Turkish Ministry of Health, Ministry of Tourism and Ministry of Economy. Especially, with the infrastructure works carried for public and city hospitals has been capable of providing health tourism services within the organization which is called “USHAŞ (International Health Services)”. The health tourism sector offers significant opportunities for Turkey during Covid-19 pandemic effects on our current account deficit and the decline in economic recovery of our tourism industry and losses. With health tourism created opportunities is already in an increasing trend, to contribute to the country’s economy much faster by increasing target markets with public-private cooperation.

What Explains Current Account Surplus in Korea?

2018 ◽  
Vol 17 (2) ◽  
pp. 70-93
Author(s):  
Chirok Han ◽  
Kwanho Shin
Keyword(s):  
Exchange Rate ◽  
Fiscal Policy ◽  
Current Account ◽  
Current Account Balance ◽  
Budget Deficits ◽  
Current Account Surplus ◽  
Short Run ◽  
The Right ◽  
The Impact ◽  
The Current Account

Since the currency crisis in 1998, Korea has experienced continuous current account surpluses. Recently, the current account surplus increased more rapidly—amounting to 7.7 percent of GDP in 2015. In this paper, we investigate the underlying reasons for the widening of Korea's current account surpluses. We find that the upward trend in Korea's current account surpluses is largely explained by its demographical changes. Other economic variables are only helpful when explaining short run fluctuations in current account balances. Moreover, we show that Korea's current account surplus is expected to disappear by 2042 as it becomes one of the most aged economies in the world. Demographic changes are so powerful that they explain, quite successfully, the current account balance trends of other economies with highly aged populations such as Japan, Germany, Italy, Finland, and Greece. When we add the real exchange rate as an additional explanatory variable, it is statistically significant with the right sign, but the magnitude explained by it is quite limited. For example, to reduce the current account surplus by 1 percentage point, a 12 percent depreciation is needed. If Korea's current exchange rate is undervalued 4 to 12 percent less than the level consistent with fundamentals, it is impossible to reduce Korea's current account surplus to a reasonable level by adjusting the exchange rate alone. Another way to reduce current account surplus is to expand fiscal policies. We find, however, that the impact of fiscal adjustments in reducing current account surplus is even more limited. According to our estimates, reducing the current account surplus by 1 percentage point requires an increase in budget deficits (as a ratio to GDP) of 5 to 6 percentage points. If we allow endogenous movements of exchange rate and fiscal policy, the impact of exchange rate adjustment increases by 1.6 times but that of fiscal policy decreases that it is no longer statistically significant.

scholarly journals DEMOGRAPHIC BONUS ANALYSIS AND ECONOMIC GROWTH OF EAST JAVA

2018 ◽  
Vol 2 (1) ◽  
pp. 8-21
Author(s):  
Amirusholihin ◽  
Listiono
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Demographic Variables ◽  
Spatial Inequality ◽  
Solow Model ◽  
Dynamic Panel Model ◽  
Goods And Services ◽  
Panel Model ◽  
Working Age ◽  
The Impact

BKKBN predicts that Indonesia will get demographic bonus in 2020 until 2030. The question is whether the demographic bonus has a positive impact on the economy of East Java or even a negative impact. Based on data from BPS, by 2015 the workingage population in East Java is around 69.4 percent of the total population, while the child and old-age is 30.6 percent. The size of the working-age population is closely related to the amount of labor, which also greatly determines the amount of output on goods and services produced. This paper aims to explain how the impact of demographic bonuses on East Java's regional economy, based on the Solow model extended to include demographic variables. The analysis uses a dynamic panel model by 38 districts in East Java that have demographic bonuses in 2020 with GDP as a reference in determining the growth of economists. From these analyzes it can be seen the impact of demographic bonuses in East Java as an advantage or even create new spatial inequality between regions.

scholarly journals Explaining India’s current account deficit: a time series perspective

2019 ◽  
Vol 26 (1) ◽  
pp. 117-138
Author(s):  
Harendra Kumar Behera ◽  
Inder Sekhar Yadav
Keyword(s):  
Current Account ◽  
Unit Root ◽  
Current Account Deficit ◽  
Structural Break ◽  
Current Account Balance ◽  
Fiscal Deficit ◽  
Causality Test ◽  
Content Type ◽  
Financial Account ◽  
Cointegration Tests

Purpose The purpose of this paper is to examine the issue of high current account deficit (CAD) from various perspectives focussing its behaviour, financing pattern and sustainability for India. Design/methodology/approach To begin with the trends, composition and dynamics of CAD for India are analysed. Next, the influence of capital flows on current account is investigated using Granger non-causality test proposed by Toda and Yamamoto (1995) between current account balance (CAB) to GDP ratio and financial account balance to GDP ratio. Also, the sustainability of India’s current account is examined using different econometrics techniques. In particular, Husted’s (1992), Johansen’s cointegration and vector error correction model (VECM) is applied along with conducting unit root and structural break tests wherever applicable. Further, long-run and short-run determinants of the CAB are estimated using Johansen’s VECM. Findings The study found that the widening of CAD is due to fall in household financial savings and corporate investments. Also, it was found that a large part of India’s CAD has been financed by FDI and portfolio investments which are partly replaced by short-term volatile flows. The unit root and cointegration tests indicate a sustainable current account for India. Further, econometric analysis reveals that India’s current account is driven by fiscal deficit, terms of trade growth, inflation, real deposit rate, trade openness, relative income growth and the age dependency factor. Practical implications Since India’s CAD has widened and is expected to widen primarily due to rise in gold and oil imports, policy makers should focus on achieving phenomenal export growth so that a sustainable current account is maintained. Also, with rising working-age and skilled population, India should focus more on high-value product exports rather than low-value manufactured items. Further, on the structural side it is important to correct fiscal deficit as it is one of the important factors contributing to large CAD. Originality/value The paper is an important empirical contribution towards explaining India’s CAD over time using latest and comprehensive data and econometric models.

Residents’ Perception towards Hosting the 2019 Southeast Asian Games: Is the Philippines as a Developing Country Ready for Sport Tourism?

2019 ◽  
Vol 25 ◽  
pp. 1-9
Author(s):  
Reylin Maciejewski
Keyword(s):  
The Philippines ◽  
Southeast Asian ◽  
Demographic Variables ◽  
Sport Tourism ◽  
Negative Consequences ◽  
Physically Active ◽  
Income Status ◽  
Working Age ◽  
Media Preference ◽  
The Impact

Sport tourism has been identifi ed as one of the most important industries of recent years. Research about Philippine sport tourism, however, is scarce. The aim of the present investigation was to assess residents’ perception on the impact of hosting an international sports event on their community. A previously validated impact questionnaire was used in this study. The respondents were 262 (Males, n=47%; Females, n=53%) residents of the diff erent cities hosting the 2019 Southeast Asian Games (SEAG) in the Philippines. They were generally well-educated (87%), of prime working age (68%), average earners (76%), physically active (61.3%), and watched sports (51%) using mobile devices (59%). The results revealed that the respondents (81.3%) generally support the present SEAG. The majority agree that the event would signal urban development (77.8%), develop positive socio-psychological benefi ts (84%) such as civic pride but also bring about negative consequences (57.6%) such as overcrowding and traffi c congestion. There is general ambivalence about the positive outcomes outweighing the negative ones. Among the demographic variables, age (p=0.002), gender (p=0.004), income status (p=0.027) and media preference (p=0.018) have signifi cant eff ects on the respondents’ support for the event. Although there is general support for hosting the international sports event, the respondents’ general perception was marred by domestic issues related to corruption, environmental destruction and displacement of some ethnic groups.

Asia-Pacific Regional Outlook

Policy Papers ◽  
2005 ◽  
Vol 2005 (75) ◽  
Author(s):  
Keyword(s):  
Current Account ◽  
Regional Growth ◽  
Oil Prices ◽  
Food Prices ◽  
Domestic Demand ◽  
Asia Pacific ◽  
Current Account Balance ◽  
China And India ◽  
The Impact

Looking ahead, prospects are relatively bright. Regional growth is expected to amount to 6 percent both this year and next, propelled by vigorous exports and strong domestic demand in China and India. Meanwhile, headline inflation is expected to remain around 3—3½ percent, as lower food prices offset the impact of higher oil prices. At the same time, the region’s current account balance is forecast to remain around 3 percent of GDP, albeit with large changes in its distribution.

Sign in / Sign up

Export Citation Format

Share Document