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Current account sustainability in Central and Eastern Europe: structural change and crisis

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  • Juan Carlos Cuestas

    (Jaume I University
    Tallinn University of Technology
    Eesti Pank)

  • Mercedes Monfort

    (Jaume I University)

Abstract

In this paper we analyse the evolution of the current account as a percentage of GDP for a group of Central and Eastern European Countries. Instead of analysing only the variable for unit roots, we go a step further and test for different speeds of mean reversion dependent on break dates endogenously determined. We apply the Bai and Perron method to find that most countries have managed to balance their current account, but some of them should keep an eye on the low speed of mean reversion and the deviation of the time trend from balance.

Suggested Citation

  • Juan Carlos Cuestas & Mercedes Monfort, 2021. "Current account sustainability in Central and Eastern Europe: structural change and crisis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 141-153, February.
    • Handle: RePEc:kap:empiri:v:48:y:2021:i:1:d:10.1007_s10663-020-09473-7
    DOI: 10.1007/s10663-020-09473-7
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    References listed on IDEAS

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    Cited by:

    1. Olufemi G. Onatunji, 2023. "Sustainability of current account deficits in Nigeria: evidence from the asymmetric NARDL approach," SN Business & Economics, Springer, vol. 3(10), pages 1-22, October.

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    More about this item

    Keywords

    Debt; Central and Eastern Europe; Structural breaks; European integration;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F15 - International Economics - - Trade - - - Economic Integration

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