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What Causes the Volatility of the Balancing Item?

Author

Listed:
  • Mei-yin Lin

    (Department of Economics, Shih Hsin University, Taiwan)

  • Hui-hua Wang

    (Department of Public Finance, National Chengchi University, Taiwan)

Abstract

This paper analyzes the impacts of timing errors, capital flows and economic openness on the behavior of the balancing item. We choose Norway, Sweden, Philippines and South Africa as sample countries where the size of the balancing item is often excess the IMF's criterion of ‘smallness'. The empirical results show that the sources of the volatility of the balancing item are different among these four countries.

Suggested Citation

  • Mei-yin Lin & Hui-hua Wang, 2009. "What Causes the Volatility of the Balancing Item?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2738-2748.
    • Handle: RePEc:ebl:ecbull:eb-09-00388
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I4-P28.pdf
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    References listed on IDEAS

    as
    1. Bénédicte Vidaillet & V. d'Estaintot & P. Abécassis, 2005. "Introduction," Post-Print hal-00287137, HAL.
    2. Vinod Mishra & Russell Smyth & Tuck Cheong Tang, 2008. "Is The Balancing Item For Australia Sustainable? Evidence From A Threshold Autoregressive Model With An Autoregressive Unit Root," Australian Economic Papers, Wiley Blackwell, vol. 47(2), pages 190-198, June.
    3. Prakash Loungani & Paolo Mauro, 2001. "Capital Flight from Russia," The World Economy, Wiley Blackwell, vol. 24(5), pages 689-706, May.
    4. Tuck Cheong Tang, 2006. "The influences of economic openness on Japan's balancing item: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 13(1), pages 7-10.
    5. Dietrich K. Fausten & Brett Pickett, 2004. "‘Errors & Omissions’ in the Reporting of Australia's Cross‐Border Transactions," Australian Economic Papers, Wiley Blackwell, vol. 43(1), pages 101-115, March.
    6. Benkwitz, Alexander & Lütkepohl, Helmut & Wolters, Jürgen, 2001. "Comparison Of Bootstrap Confidence Intervals For Impulse Responses Of German Monetary Systems," Macroeconomic Dynamics, Cambridge University Press, vol. 5(1), pages 81-100, February.
    7. Alexander Benkwitz & Michael Neumann & Helmut Lutekpohl, 2000. "Problems related to confidence intervals for impulse responses of autoregressive processes," Econometric Reviews, Taylor & Francis Journals, vol. 19(1), pages 69-103.
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    Citations

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    Cited by:

    1. Serkan TAŞTAN, 2015. "Sustainability of balancing item of balance of payment for OECD countries: evidence from Fourier Unit Root Tests," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(604), A), pages 93-100, Autumn.
    2. Maria Siranova & Menbere Workie Tiruneh, 2016. "The determinants of errors and omissions in a small and open economy: The case of Slovakia," Working Papers wp73, Institute of Economic Research, Slovak Academy of Sciences, revised 08 Apr 2016.
    3. Tang Tuck Cheong, 2017. "New Perspective on the ‘Net Errors and Omissions’ in Balance of Payment Accounts: An Empirical Study in Australia," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 13(2), pages 27-44.
    4. Suna Şahin, 2022. "Net Errors and Omissions Account Overview: Analysis of Selected Countries (1980-2018)," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 9(1), pages 103-120, January.
    5. Liung shi Ding & Tuck cheong Tang, 2017. "‘Net Errors and Omissions' of Balance of Payments and Its Sustainability: A Survey of Literature," Economics Bulletin, AccessEcon, vol. 37(4), pages 2753-2766.
    6. repec:agr:journl:v:3(604):y:2015:i:3(604):p:93-100 is not listed on IDEAS

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    More about this item

    Keywords

    Balancing item; Balance of payments;

    JEL classification:

    • F3 - International Economics - - International Finance
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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