IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Interaction Between Capital Flows And Current Account: A Dynam?C Panel Causal?Ty Analys?S Of 19 Emerg?Ng Market Econom?Es For The Per?Od 1980 To 2009

Listed author(s):
  • A.Yasemin YALTA
  • Bahar BAYRAKTAR-SAGLAM
Registered author(s):

    We empirically examine the causal relation between current account and different types of foreign capital flows applying a dynamic panel causality approach, which enables us to deal with the endogeneity between foreign capital flows and current account. Our analysis based on 19 emerging market economies indicates that foreign direct investment and portfolio flows Granger-cause current account. This finding raises questions regarding the sustainability of current account deficits in emerging market economies, which rely on foreign capital inflows for financing the deficit.

    If 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.

    File URL: http://www.usc.es/~economet/journals1/aeid/aeid1622.pdf
    Download Restriction: Access restricted to subscribers. Free on line subscription for universities from low income countries. More information at http://www.usc.es/economet/info.htm

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 16 (2016)
    Issue (Month): 2 ()
    Pages: 25-32

    as
    in new window

    Handle: RePEc:eaa:aeinde:v:16:y:2016:i:2_2
    Contact details of provider: Web page: http://www.usc.es/economet/eaa.htm

    Order Information: Web: http://www.usc.es/economet/info.htm Email:


    References listed on IDEAS
    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.:

    as
    in new window


    1. Eswar S. Prasad & Raghuram G. Rajan, 2008. "A Pragmatic Approach to Capital Account Liberalization," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 149-172, Summer.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Yan, Ho-don & Yang, Cheng-lang, 2008. "Foreign Capital Inflows and the Current Account Imbalance: Which Causality Direction?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 434-461.
    4. Chinn, Menzie D. & Ito, Hiro, 2007. "Current account balances, financial development and institutions: Assaying the world "saving glut"," Journal of International Money and Finance, Elsevier, vol. 26(4), pages 546-569, June.
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    6. GUISAN, Maria-Carmen, 2015. "Selected Readings On Econometrics Methodology, 2001-2010: Causality, Measure Of Variables, Dynamic Models And Economic Approaches To Growth And Development," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(2), pages 213-220.
    7. Elena Podrecca & Gaetano Carmeci, 2001. "Fixed investment and economic growth: new results on causality," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 177-182.
    8. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    9. Sajal Lahiri & A. K. M. Mahbub Morshed, 2010. "Current Account Imbalances and Foreign Investment: A Theoretical Analysis of Interrelationships and Causalities," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 369-381, May.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eaa:aeinde:v:16:y:2016:i:2_2. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (M. Carmen Guisan)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.