The Determinants of Current Account Imbalances in Malawi
AbstractPersistent current account imbalances in many least developed and emerging countries have excited considerable interest among researchers and policy makers to have a clear understanding of the dynamics of the current account and its role in macroeconomic outcomes. Based on the saving-investment theory, this paper uses cointegration analysis to identify the long run and short-run determinants of Malawi’s current account deficit using annual data from 1980 to 2006. Results suggest that openness, terms of trade, external debt accumulation, and current account liberalization fundamentally determined the current account deficit in Malawi. Furthermore, results reveal that these deficits have been, to a large extent, persistent.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14694.
Date of creation: Apr 2009
Date of revision:
Current Account Balance; Saving-Investment Balances; Cointegration;
Find related papers by JEL classification:
- F0 - International Economics - - General
This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-04-25 (Africa)
- NEP-ALL-2009-04-25 (All new papers)
- NEP-OPM-2009-04-25 (Open Economy Macroeconomic)
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