Current And Capital Account Interdependence: An Empirical Test
AbstractThis study uses two alternative specifications to test the interdependence between the current and capital accounts of the balance of payments. The empirical specifications, derived from the balance of payments constraint and from national income accounting relationships, respectively, yield consistent support for the interdependence hypothesis. The balance of payments specification returns positive findings for nine of the ten sample countries. These are corroborated by the general equilibrium specification in three instances. Neglect of the comprehensive lag structure of the underlying model may account for the relatively weak support from the general equilibrium specification of the interdependence hypothesis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 04/08.
Length: 31 pages
Date of creation: 01 Mar 2008
Date of revision:
Contact details of provider:
Postal: Department of Economics, Monash University, Victoria 3800, Australia
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC
Find related papers by JEL classification:
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ACC-2009-07-17 (Accounting & Auditing)
- NEP-ALL-2009-07-17 (All new papers)
- NEP-MON-2009-07-17 (Monetary Economics)
- NEP-OPM-2009-07-17 (Open Economy Macroeconomic)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dietrich K. Fausten, 1990. "Current and Capital Account Interdependence," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 12(2), pages 273-292, January.
- Chorng-Huey Wong & Luis Carranza, 1999.
"Policy Responses to External Imbalances in Emerging Market Economies: Further Empirical Results,"
IMF Staff Papers,
Palgrave Macmillan, vol. 46(2), pages 5.
- Luis Carranza & Chorng-Huey Wong, 1998. "Policy Responses to External Imbalances in Emerging Market Economies - Further Empirical Results," IMF Working Papers 98/103, International Monetary Fund.
- Tuck Cheong Tang, 2006. "The influences of economic openness on Japan's balancing item: an empirical note," Applied Economics Letters, Taylor and Francis Journals, vol. 13(1), pages 7-10.
- Martin Feldstein & Charles Horioka, 1979.
"Domestic Savings and International Capital Flows,"
NBER Working Papers
0310, National Bureau of Economic Research, Inc.
- Dietrich K. Fausten & Brett Pickett, 2004. "'Errors & Omissions' in the Reporting of Australia's Cross-Border Transactions," Australian Economic Papers, Wiley Blackwell, vol. 43(1), pages 101-115, 03.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus).
If references are entirely missing, you can add them using this form.