Current-Account Reversals in Developing Countries: The Role of Fundamentals

Bagnai, Alberto and Manzocchi, Stefano (1998) Current-Account Reversals in Developing Countries: The Role of Fundamentals. [Working Paper]. Social Science Electronic Pub. p. 32. SSRN Working Paper Series

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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.

Item Type: Report / Paper (Working Paper)
Research documents and activity classification: Working Papers > Refereed Working Papers / of international relevance
Divisions: Department of Economics and Finance > LLEE (Luiss Lab of European Economics)
Additional Information: The definitive version of the paper has been published in "Open Economies Review", Vol. 10 (2), Pages 143-163, May 1999.
Uncontrolled Keywords: Current-account dynamics; Developing countries; Unit roots; Structural breaks; Panel data.
MIUR Scientific Area: Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited by: Maria Teresa Nisticò
Date Deposited: 07 Dec 2010 15:48
Last Modified: 22 Apr 2015 00:14


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