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‘Net Errors and Omissions' of Balance of Payments and Its Sustainability: A Survey of Literature

Author

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  • Liung shi Ding

    (Department of Economics, Faculty of Economics and Administration, University of Malaya)

  • Tuck cheong Tang

    (Department of Economics, Faculty of Economics and Administration, University of Malaya)

Abstract

This survey covers 18 studies on ‘net errors and omissions' (NEO) or balancing items. Three groups have been classified by research interest (i) NEO sustainability; (ii) ‘sources' or ‘factors' of determining NEO behaviour; and (iii) components of NEO (i.e. nonlinearity). This survey focuses on the first group. 40% of the sample countries examined by the literature shows sustainable NEO. The meta-analysis recommends the method, region, and income “common factors†are found to have mixture implication on sustainable NEO.

Suggested Citation

  • Liung shi Ding & Tuck cheong Tang, 2017. "‘Net Errors and Omissions' of Balance of Payments and Its Sustainability: A Survey of Literature," Economics Bulletin, AccessEcon, vol. 37(4), pages 2753-2766.
    • Handle: RePEc:ebl:ecbull:eb-16-00803
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    References listed on IDEAS

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    1. Baharumshah, Ahmad Zubaidi & Lau, Evan & Fountas, Stilianos, 2003. "On the sustainability of current account deficits: evidence from four ASEAN countries," Journal of Asian Economics, Elsevier, vol. 14(3), pages 465-487, June.
    2. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    3. 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.
    4. Duffy, M & Renton, Anthony, 1971. "An Analysis of the U. K. Balancing Item," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(3), pages 448-464, October.
    5. 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.
    6. Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
    7. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    8. Tuck Cheong Tang, 2006. "The influences of economic openness on Japan's balancing item: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 13(1), pages 7-10.
    9. Mei-yin Lin & Hui-hua Wang, 2009. "What Causes the Volatility of the Balancing Item?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2738-2748.
    10. Tuck Cheong Tang, 2013. "New Perspectives on the ‘Net Errors & Omissions’ in Balance of Payment Accounts: An Empirical Study - Australia," Monash Economics Working Papers 54-13, Monash University, Department of Economics.
    11. Dietrich K. Fausten & Brett Pickett, 2004. "‘Errors & Omissions’ in the Reporting of Australia's Cross‐Border Transactions," Australian Economic Papers, Wiley Blackwell, vol. 43(1), pages 101-115, March.
    12. 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.
    13. Christis Tombazos, 2003. "New light on the 'impressionistic view' of the balancing item in Australia's balance of payments accounts," Applied Economics, Taylor & Francis Journals, vol. 35(12), pages 1369-1378.
    14. 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.
    15. 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.
    16. Tuck Cheong Tang, 2006. "Japan's balancing item: do timing errors matter?," Applied Economics Letters, Taylor & Francis Journals, vol. 13(2), pages 81-87.
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    Cited by:

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    2. Siranova, Maria, 2024. "Statistical omissions as the stabilizing factor of net foreign assets in EU countries," International Economics, Elsevier, vol. 178(C).

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    More about this item

    Keywords

    Balancing item; Net errors and omissions; Sustainability;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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