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Context of external economic imbalances adjustments and long-term economic growth
[Analýza souvislostí strukturální nápravy vnější ekonomické nerovnováhy a dlouhodobého ekonomického růstu]

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  • Jiří Pour

Abstract

Theoretically, external economic imbalance can be seen as an issue of chronic over-investment or under-saving of economies, and the process of correction may therefore be interpreted as a systematic movement of the national saving and investment rates towards their long-term equilibrium values. Such movement can be captured as a structural break in time series. We tried to empirically verify the long-term effects of the external imbalances adjustments on economic growth - namely whether structural breaks in the trend of relevant variables are related to the occurrence of structural breaks in GDP trend. The results suggest that the long-term adjustments of external economic imbalances are associated with a higher probability of negative GDP-trend breaks. However, no one-way causal effect was identified.

Suggested Citation

  • Jiří Pour, 2020. "Context of external economic imbalances adjustments and long-term economic growth [Analýza souvislostí strukturální nápravy vnější ekonomické nerovnováhy a dlouhodobého ekonomického růstu]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(1), pages 5-26.
    • Handle: RePEc:prg:jnlcfu:v:2020:y:2020:i:1:id:541:p:5-26
    DOI: 10.18267/j.cfuc.541
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    More about this item

    Keywords

    External economic imbalance; Current account reversal; Savings; Investment; Structural breaks; Vnější ekonomická rovnováha; Obrat běžného účtu; Úspory; Investice; Strukturální zlomy;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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