A Sustainability Analysis Of Serbia’S Current Account Deficit
AbstractThe global economic crisis have important implications for international capital movements, which further sharpens the question of the sustainability of permanent current account deficits in Southeast Europe. The goal of this paper is to analyse the medium-and long-term sustainability of Serbia’s current account deficit. The first part of the paper presents a factor analysis of the sustainability of Serbia’s current account deficit. In the second part of the paper the theoretical model created by Milesi-Ferretti and Razin is used to access Serbia’s medium-term current account sustainability. On the basis of Reisen’s theoretical work (Reisen methodology) and by adding net reinvested earnings from foreign direct investment to the model, a new (modified) model for assessing the long-term sustainability of a country’s current account deficit is presented. The created model was used for assessing the long-term sustainability of Serbia’s current account deficit.
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Bibliographic InfoArticle provided by Faculty of Economics, University of Belgrade in its journal Economic Annals.
Volume (Year): 57 (2012)
Issue (Month): 195 (October - December)
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
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