On the Stationarity of Current Account Deficits in the European Union
AbstractIn this paper, we test for the stationarity of EU current account deficits. Our testing strategy addresses two key concerns with regard to unit root panel data testing, namely (i) the identification of which panel members are stationary, and (ii) the presence of cross-sectional dependence. For this purpose, we employ an AR-based bootstrap approach to the Hadri (2000) test. While there is only mixed evidence that current account stationarity applies when examining individual countries, this does not appear to be case when considering panels comprising both EU and non-EU members.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 05_10.
Date of creation: Jan 2010
Date of revision:
Heterogeneous dynamic panels; current account stationarity; mean reversion; panel stationarity test;
Other versions of this item:
- Mark J. Holmes & Jes�s Otero & Theodore Panagiotidis, 2010. "On the Stationarity of Current Account Deficits in the European Union," Review of International Economics, Wiley Blackwell, vol. 18(4), pages 730-740, 09.
- Mark J. Holmes & Theodore Panagiotidis & Jesus Otero, 2009. "On the stationarity of current account deficits in the European Union," Discussion Paper Series 2009_18, Department of Economics, University of Macedonia, revised Dec 2009.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-24 (All new papers)
- NEP-BEC-2010-04-24 (Business Economics)
- NEP-ECM-2010-04-24 (Econometrics)
- NEP-EEC-2010-04-24 (European Economics)
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