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An Investigation of Current Account Solvency in Latin America Using Non Linear Nonstationarity Tests

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  • Chortareas Georgios E

    (Bank of England)

  • Kapetanios George

    (Queen Mary University of London)

  • Uctum Merih

    (City University of New York)

Abstract

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.

Suggested Citation

  • Chortareas Georgios E & Kapetanios George & Uctum Merih, 2004. "An Investigation of Current Account Solvency in Latin America Using Non Linear Nonstationarity Tests," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 8(1), pages 1-19, March.
    • Handle: RePEc:bpj:sndecm:v:8:y:2004:i:1:n:4
    DOI: 10.2202/1558-3708.1200
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