An Investigation of Current Account Solvency in Latin America Using Non Linear Nonstationarity Tests
Using a new methodology that allows nonlinearities, we find frequent support for external debt sustainability in a number of Latin American countries. Our findings reverse the results for several countries, obtained with traditional unit-root tests and present a richer framework for evaluating the external solvency of an economy. Our results also provide some justification for the assumption the international current accounts are based on.
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Volume (Year): 8 (2004)
Issue (Month): 1 (March)
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