On the relation between financial flows and the trade balance in developing countries
Using time-series annual data for a sample of developing countries, this paper investigates the empirical validity of theoretical predictions regarding determinants of fluctuations in the trade balance and financial flows. The motive is to see if standard conjectures about possible determinants have broad support across these countries. While the evidence provides some support to theoretical predictions, statistical significance appears limited. Given mixed results, a large component of fluctuations in the trade balance and financial flows appears to be random in developing countries. Such randomness limits the ability of policy makers to interpret cyclical variations in components of the balance of payments. Moreover, this randomness raises concerns about the sustainability of a widening trade deficit and sources of financing in many developing countries.
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.
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.
Volume (Year): 18 (2009)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RJTE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RJTE20|
When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:18:y:2009:i:3:p:373-393. 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.