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The Australian Trade Balance and Current Account: a Time Series Perspective

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  • Philip Bodman

Abstract

This paper examines the dynamic relationship between Australian imports and exports in both the short and long-run using recent cointegration and error-correction techniques. The analysis has direct implications over the specification and estimation of Australian import and export functions and resulting elasticity estimates. The paper also addresses the issue of sustainability of persistent current account deficits in the Australian context and provides a test of whether Australia is satisfying its intertemporal (or present value) budget constraint (IBC).

Suggested Citation

  • Philip Bodman, 1997. "The Australian Trade Balance and Current Account: a Time Series Perspective," International Economic Journal, Taylor & Francis Journals, vol. 11(2), pages 39-57.
    • Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:39-57
    DOI: 10.1080/10168739700000010
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    Cited by:

    1. Arize, Augustine C., 2002. "Imports and exports in 50 countries: Tests of cointegration and structural breaks," International Review of Economics & Finance, Elsevier, vol. 11(1), pages 101-115, April.

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