- Journal of Business Economics and Finance
- Vol: 5 Issue: 2
- SUSTAINABILITY OF CURRENT ACCOUNT DEFICITS IN BRICS COUNTRIES
SUSTAINABILITY OF CURRENT ACCOUNT DEFICITS IN BRICS COUNTRIES
Authors : Serkan Tastan, Kivanc Halil Aric
Pages : 165-170
Doi:10.17261/Pressacademia.2016219259
View : 9 | Download : 3
Publication Date : 2016-06-30
Article Type : Other
Abstract :In this article, sustainability of the current account deficit (CAD) for BRICS countries is analyzed in a nonlinear framework. In this respect, Harvey, Leybourne, and Xiao (2008) linearity test and the unit root tests of Sollis (2009) and Kruse (2011) are used. The analysis is based on the quarterly current account (CA) balances as percentages of gross domestic product. Results indicate that the CADs are unsustainable for Brazil and India. However, the sustainability hypothesis is valid for South Africa when considering size nonlinearity.Keywords : Current account, sustainability, BRICS, unit root, nonlinearity