Testing for the sustainability of the current account deficit in two industrial countries
TThe objective of this paper is to test for the sustainability of the current account deficits in the U.S. and Canada over the 1973--1994 period. Using various unit root and cointegration tests some of which allow for structural changes, we conclude that the real current account deficits-to-GDP ratios are not sustainable.
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- Husted, Steven, 1992. "The Emerging U.S. Current Account Deficit in the 1980s: A Cointegration Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 159-166, February.
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- Allan w. Gregory & Bruce E. Hansen, 1992. "residual-Based Tests for Cointegration in Models with Regime Shifts," Working Papers 862, Queen's University, Department of Economics.
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- Peter Liu & Evan Tanner, 1995. "Intertemporal solvency and breaks in the US deficit process: a maximum-likelihood cointegration approach," Applied Economics Letters, Taylor & Francis Journals, vol. 2(7), pages 231-235.
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- West, Kenneth D, 1988. "Asymptotic Normality, When Regressors Have a Unit Root," Econometrica, Econometric Society, vol. 56(6), pages 1397-1417, November.
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