Theoretical and Applied Economics
No. 4 / 2016 (609), Winter
Current account sustainability in SAARC economies: Evidence from combined cointegration approach
Indian Institute of Technology Madras, India
M Suresh BABU
Indian Institute of Technology Madras, India
Umakant DASH
Indian Institute of Technology Madras, India
Abstract. Majority of the South Asian economies are experiencing continuous deficits in their current account along with high external borrowing. This may question the sustainability of their external obligation in the long run. Therefore, this study examines the long run sustainability of current account imbalances of Seven South Asian economies for the period 1980 to 2014. By applying the recently developed econometric methods, we found that the current account of Maldives and Sri Lanka is sustainable in the long run, while for the rest of the South Asian economies the current account is not sustainable. This results have important policy implications. In particular, the South Asian economies should increase their cooperation with each other in terms of trade and investment to minimize the external sector imbalances and to achieve an increasing growth momentum in the future.
Contents
The influence of fiscal freedom, government effectiveness and human development index on tax evasion in the European Union
Limitation of ARIMA models in financial and monetary economics
The Romania's challenges regarding the integration in the Euro Area
Does remittance drive economic growth in emerging economies: Evidence from FMOLS and Panel VECM
Effectiveness of monetary policies in OECD countries
Determinants of household loans
Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply
Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries
New pillars of the banking business model or a new model of doing banking?
Effects of R&D and innovation on income in EU countries: new generation panel cointegration and causality analysis
The major economic evolution of Romania by the middle of 2016
Foreign aid, macroeconomic policies and economic growth nexus in India: An ARDL bounds testing approach
Human nature in the economic behavior based on the neoclassical economic model
Determinants of nonperforming assets-bank-specific and macroeconomic factors: A panel data analysis of different group of commercial banks operating in India
Gradualistic strategy of transition to market economy
Financial liberalization and economic growth: Evidence from Tunisia
Public target space as key factor for public policy implementation
The relationships among the returns of investment instruments: a vector autoregressive approach for Turkey
Current account sustainability in SAARC economies: Evidence from combined cointegration approach
Information asymmetry and technical efficiency: Case of a panel of Tunisian insurance companies
FDI and export spillovers using Heckman’s two step approach: Evidence from Turkish manufacturing data