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Testing for the sustainability of the current account deficit in two industrial countries

Fountas, Stilianos
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Publication Date
1996-07
Keywords
Economics, Deficit sustainability, Regime shifts, Cointegration
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Working Paper
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Fountas, S. (1996). "Testing for the sustainability of the current account deficit in two industrial countries" (Working Paper No. 011) Department of Economics, National University of Ireland, Galway.
Abstract
The 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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National University of Ireland, Galway
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Attribution-NonCommercial-NoDerivs 3.0 Ireland
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Economics (Working Papers)