scholarly journals THE LONG-RUN RELATIONSHIP BETWEEN R&D SPENDING AND CURRENT ACCOUNT BALANCES: A PANEL DATA ASSESSMENT

2021 ◽  
Author(s):  
Murat ÇETREZ
Keyword(s):  
Panel Data ◽  
Current Account ◽  
Long Run ◽  
Data Assessment ◽  
Current Account Balances

scholarly journals Unemployment and Current Account Imbalances in Nigeria

2020 ◽  
Vol 2 (12, 20) ◽  
Author(s):  
Ewere F.O. Okungbowa ◽  
◽  
Adesuwa O. Erediauwa ◽  
Keyword(s):  
Current Account ◽  
Unemployment Rate ◽  
Current Account Deficit ◽  
Output Growth ◽  
High Rate ◽  
Current Account Surplus ◽  
Long Run ◽  
Current Account Imbalances ◽  
Current Account Balances ◽  
Account Imbalances

This study explores the link that exists between unemployment and current account imbalances in Nigeria from 1980 to 2014. It adopted the ARDL bounds test approach. The result gave evidence for a long-run relationship between the variables and also revealed a significant and inverse relationship between current account surplus and unemployment. Showing that a 1% increase in current account balances in favour of export will lead to a drop in the unemployment rate by 0.117893%. This, therefore, implies that current account deficit will cause a fall in employment and in turn a rise in the unemployment rate. Consequently, current account deficit leads to wage differentials in favour of the exporting countries as against importing countries, like Nigeria, and as such triggers a high rate of unemployment. We strongly recommend diversification of the country’s export-base which may increase employment opportunities and in turn reduce the unemployment rate. Keywords: Unemployment, Employment, Current Account Balances, Balance of payment, Output growth

scholarly journals Financial integration, euro and the twin deficits of southern Eurozone countries

2013 ◽  
Vol 60 (2) ◽  
pp. 161-178 ◽  
Author(s):  
Nikolina Kosteletou
Keyword(s):  
Fiscal Policy ◽  
Panel Data ◽  
Empirical Analysis ◽  
Current Account ◽  
Financial Integration ◽  
Twin Deficits ◽  
Euro Zone ◽  
The North ◽  
The Relationship ◽  
Current Account Balances

The purpose of this study is the examination of the relationship between fiscal and Current Account balances for the countries of southern eurozone. The twin deficit hypothesis is tested within the context of a portfolio model involving variables from the financial sector. Empirical analysis is conducted with panel data, for the period 1991-2011. Evidence is provided to support the twin deficit hypothesis. Additionally, it is found that it is not only the fiscal policy of the southern eurozone countries that affects their Current Account balances, but also the fiscal policy of the eurozone surplus countries of the north. Interdependence of euro-zone countries suggests that fiscal policy can be used for the elimination of external disequilibrium. Therefore, fiscal policy should be coordinated but not uniformly applied.

scholarly journals Sustainability of current account balances in small states

2020 ◽  
Vol 9 (1) ◽  
pp. 14
Author(s):  
Jeetendra Khadan ◽  
Amrita Deonarine
Keyword(s):  
Current Account ◽  
Panel Cointegration ◽  
Weak Form ◽  
Budget Constraint ◽  
Small States ◽  
Current Account Deficits ◽  
Current Account Sustainability ◽  
Long Run ◽  
Cointegration Tests ◽  
Current Account Balances

This article applies the inter-temporal budget constraint framework and panel cointegration tests to examine the sustainability of current account deficits in 17 small states over the period 1995-2016. The findings show the existence of cointegration between real exports and real imports, but with the magnitude of the long-run coefficient being less than one, which support a “weak” form of current account sustainability in small states.

scholarly journals Sustainability of Current Account Deficits in the OECD Countries: Evidence from Panel Data Estimators

2017 ◽  
Vol 17 (4) ◽  
pp. 20170069
Author(s):  
Tarlok Singh
Keyword(s):  
Panel Data ◽  
Current Account ◽  
Oecd Countries ◽  
Single Equation ◽  
Numerical Magnitude ◽  
Market Failures ◽  
Current Account Deficits ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Consistent Support

This study estimates the intertemporal model for the relationship between imports and exports and examines the sustainability of CADs and validity of IBC for a comprehensive set of 24 OECD countries. The balanced panel data model is estimated using several single-equation and system estimators to assess the robustness of results across methodologies and test statistics. The study finds that the numerical magnitude of the slope parameter of imports is close to unity consistently across estimators. The standard panel data estimators provide consistent support for the sustainability of CADs and validity of IBC. The optimal FMOLS and DOLS estimators cross-validate the evidence and reinforce the sustainability of CADs. The residual-based single-equation and the VAR-based system cointegration estimators provide consistent support for the long-run equilibrium relationship between imports and exports. The support for the sustainability of CADs suggests that the current account deficits are only short-run phenomena and are balanced by future surpluses. The macroeconomic stabilisation strategies seem to have been effective in correcting the market failures and maintaining the steady-state equilibrium relationship between the inflow and outflow of resources.

Exchange rates in India: current account monetarism in a nonlinear context

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Aditi Chaubal
Keyword(s):  
Exchange Rate ◽  
Current Account ◽  
Polynomial Function ◽  
Mean Reversion ◽  
Smooth Transition ◽  
Monetary Model ◽  
Forecast Performance ◽  
Long Run ◽  
Nonlinear Mean Reversion ◽  
Long Run Equilibrium

AbstractThe Indian exchange rate system has evolved from a pegged system to the current managed float. The study examines the presence of a long-run equilibrium in the monthly Indian exchange rate (Rs/USD) using a current account monetary model (or flexible price monetary model) while accounting for different nonlinearities over the period January 1993 to January 2014 (pre-inflation targeting period). The nonlinear adjustment to disequilibria is modelled using a nonlinear error correction model (NLECM). The nonlinear current account monetarism (CAM) model includes nonlinear transformations of long-run dynamics in the ECM to account for different nonlinearities: multiple equilibria (cubic polynomial function), nonlinear mean reversion (rational polynomial function), and smooth and gradual regime switches (exponential smooth transition autoregressive (ESTAR) function). The NLECM-ESTAR model outperforms other alternatives based on model and forecast performance measures, implying the existence of nonlinear mean reversion and smooth transition across different periods of overvaluation and undervaluation of the exchange rate. This implies the presence of asymmetric adjustment to the movements from the long-run equilibrium, but the nature of such transitions is smooth and not abrupt. The paper also establishes the uniqueness of the long-run equilibrium. A comparison to the sticky price monetary model could not be made due to stationary exchange rate disequilibrium.

HABIT FORMATION AND GOVERNMENT SPENDING IN A SMALL OPEN ECONOMY

2003 ◽  
Vol 7 (3) ◽  
pp. 407-423 ◽  
Author(s):  
Cem Karayalçin
Keyword(s):  
Fiscal Policy ◽  
General Equilibrium ◽  
Current Account ◽  
Open Economy ◽  
Equilibrium Model ◽  
Government Spending ◽  
Time Preference ◽  
Small Open Economy ◽  
Long Run ◽  
Fiscal Shocks

The paper studies the effects of an expansionary fiscal policy in a general equilibrium model of a small open economy. Households are assumed to possess habit-forming, endogenous rates of time preference. In response to fiscal shocks, the model generates cyclical endogenous persistence and procyclical time paths for consumption, employment, and investment, as well as a countercyclical path for the current account. Furthermore, fiscal shocks are shown to have positive long-run effects on output and negative long-run effects on consumption.

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