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Public Debt, Saving-Investment-Current Account Dynamics, and Capital Mobility in OECD countries, 1999-2013

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  • Sal AMIRKHALKHALI
  • Atul DAR

Abstract

Are countries with higher relative public debt levels also characterized by lower capital mobility? This paper attempts to address this question empirically by applying an error correction model of saving-investment-current account to data from 27 OECD countries over the 1999-2013 interval. We classify countries into five groups on the basis of the relative size of public debt. Our empirical results appear to support a stable current account which is indicative of low capital mobility or binding credit constraints when the public debt is high relative to GDP.

Suggested Citation

  • Sal AMIRKHALKHALI & Atul DAR, 2016. "Public Debt, Saving-Investment-Current Account Dynamics, and Capital Mobility in OECD countries, 1999-2013," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(1), pages 5-12.
    • Handle: RePEc:eaa:aeinde:v:16:y:2016:i:1_1
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