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How Excessive Are External Imbalances In Selected Transition Countries?

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Author Info
Aleksander Aristovnik

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Abstract

This article examines the main current account balance determinants in order to assess the potential excessiveness of current account deficits in selected transition countries. For this purpose, dynamic panel-regression techniques are used to characterise the properties of current account variations across the transition regions. The results are chiefly consistent with the theoretical and previous empirical analysis, indicating a moderate level of current account deficits persistency and negative effects of economic growth, real appreciation and worsening of terms of trade on the external balances. Furthermore, the validity of the stages of development hypothesis and twin deficit hypothesis, as well as the significance of demographic factors is confirmed in the regions. Finally, the results suggest that most transition countries are justified in running relatively high current account deficits.

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Publisher Info
Article provided by University of Economics, Prague in its journal Prague Economic Papers.

Volume (Year): 2006 (2006)
Issue (Month): 3 ()
Pages: 243-267
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Handle: RePEc:prg:jnlpep:v:2006:y:2006:i:3:id:287:p:243-267

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Related research
Keywords: transition; excessiveness; dynamic panel data; determinants; current account deficits;

Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

References listed on IDEAS
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