Current-Account Reversals in Developing Countries: The Role of Fundamentals
Alberto Bagnai and
Stefano Manzocchi
Open Economies Review, 1999, vol. 10, issue 2, 143-163
Abstract:
This paper studies episodes of current-account reversal in developing countries (DCs) in the period 1965–1994. First, a number of persistent shifts (“reversals”) in the current-account balance dynamics are identified by structural break and segmented trend tests; then, the relationship between these reversals and a set of fundamentals suggested by the intertemporal approach to the current account is investigated in a panel-data set-up. We find that fundamentals play a different role in episodes of persistent deterioration or improvement of the current-account balance in DCs. Copyright Kluwer Academic Publishers 1999
Keywords: current account dynamics; developing countries; unit roots; structural breaks; panel data (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:10:y:1999:i:2:p:143-163
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DOI: 10.1023/A:1008365318228
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