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On the sustainability of the EU's current account deficits

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posted on 30.03.2007 by Mark J. Holmes, Jesus Otero, Theodore Panagiotidis
In this paper, we test for the stationarity of EU current account deficits. Our testing strategy addresses two key concerns with regard to unit root panel data testing, namely (i) the identification of which members-states are stationary, and (ii) the presence of cross-sectional dependence. For this purpose, we employ a moving block bootstrap approach to the Hadri (2000) test. While there is evidence that current account sustainability applies to panels comprising EU members, this is not the case when non-EU economies are considered.

History

School

  • Business and Economics

Department

  • Economics

Pages

119715 bytes

Publication date

2007

Notes

This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2007_6.html.

ISSN

1750-4171

Language

en

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