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New Evidence on US Current Account Sustainability

Author

Listed:
  • Juncal Cunado

    (Department of Economics, Universidad de Navarra, Spain)

  • Luis Alberiko Gil-Alana

    (Department of Economics, Universidad de Navarra, Spain)

  • Fernando Perez de Gracia

    (Department of Economics, Universidad de Navarra, Spain)

Abstract

This paper deals with the sustainability of the US current account using fractional integration. We examine nominal and real exports and imports and their corresponding values deflated by GNP. The results show that only the variables deflated by GNP may contain unit roots, while nominal and real exports and imports are integrated of order d with d>1. In addition, the differences between export and imports are also nonstationary. The possibility of structural breaks is also considered.

Suggested Citation

  • Juncal Cunado & Luis Alberiko Gil-Alana & Fernando Perez de Gracia, 2008. "New Evidence on US Current Account Sustainability," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 7(1), pages 1-21, April.
    • Handle: RePEc:ijb:journl:v:7:y:2008:i:1:p:1-21
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    References listed on IDEAS

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    Cited by:

    1. Luis Sastre, 2016. "Exchange Rate, Cross Elasticities Between Exports and Imports and Current Account Sustainability: The Spanish Case," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 32-46, November.

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    More about this item

    Keywords

    current account; fractional integration; long memory;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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