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Sustainability of balancing item of balance of payment for OECD countries: evidence from Fourier Unit Root Tests

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  • Serkan TAŞTAN

    (Cumhuriyet University, Sivas, Turkey)

Abstract

In this paper, the sustainability of the balancing item of balance of payments is examined for 33 OECD (Organization for Economic Co-operation and Development) member countries. The sample period of each country is dependent upon the availability of data and Fourier unit root tests are employed in analysis. According to the empirical analysis the balancing item of balance of payments is sustainable for Australia, Canada, Hungary, Norway, Switzerland and United States. The results also show that nonlinearity is essential characteristic for the balancing item of balance of payments.

Suggested Citation

  • Serkan TAŞTAN, 2015. "Sustainability of balancing item of balance of payment for OECD countries: evidence from Fourier Unit Root Tests," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(604), A), pages 93-100, Autumn.
    • Handle: RePEc:agr:journl:v:xxii:y:2015:i:3(604):p:93-100
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    References listed on IDEAS

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    1. Vinod Mishra & Russell Smyth & Tuck Cheong Tang, 2008. "Is The Balancing Item For Australia Sustainable? Evidence From A Threshold Autoregressive Model With An Autoregressive Unit Root," Australian Economic Papers, Wiley Blackwell, vol. 47(2), pages 190-198, June.
    2. T Tang, 2009. "Testing for Non-linearity in the Balancing Item of Balance of Payments Accounts: The Case of 20 Industrial Countries," Economic Issues Journal Articles, Economic Issues, vol. 14(2), pages 107-124, September.
    3. Mei-yin Lin & Hui-hua Wang, 2009. "What Causes the Volatility of the Balancing Item?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2738-2748.
    4. Ralf Becker & Walter Enders & Junsoo Lee, 2006. "A Stationarity Test in the Presence of an Unknown Number of Smooth Breaks," Journal of Time Series Analysis, Wiley Blackwell, vol. 27(3), pages 381-409, May.
    5. Christopoulos, Dimitris K. & León-Ledesma, Miguel A., 2010. "Smooth breaks and non-linear mean reversion: Post-Bretton Woods real exchange rates," Journal of International Money and Finance, Elsevier, vol. 29(6), pages 1076-1093, October.
    6. Tuck Cheong Tang & Evan Lau, 2008. "An Empirical Investigation On The Sustainability Of Balancing Item Of Balance Of Payment Accounts For Oic Member Countries," Monash Economics Working Papers 31/08, Monash University, Department of Economics.
    7. Tuck Cheong Tang & Evan Poh Hock Lau, 2007. "An empirical investigation on sustainability of balancing item in Asian countries," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 117-123.
    8. Tuck Cheong Tang, 2007. "Sustainability of balancing item of balance of payments accounts: fresh empirical evidence for G7 countries," Applied Economics Letters, Taylor & Francis Journals, vol. 14(4), pages 251-254.
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