Empirical Economics

, Volume 49, Issue 2, pp 389–402

An analysis of the trade balance for OECD countries using periodic integration and cointegration

  • Tomas del Barrio Castro
  • Mariam Camarero
  • Cecilio Tamarit
Article

DOI: 10.1007/s00181-014-0874-y

Cite this article as:
del Barrio Castro, T., Camarero, M. & Tamarit, C. Empir Econ (2015) 49: 389. doi:10.1007/s00181-014-0874-y

Abstract

We analyze imbalances in external accounts that have historically affected most developed countries. The purpose of this study was to shed some light on the sustainability of the current account for a group of OECD countries by merging the popular Husted (Rev Econ Stat 74(1):159–166, 1992) testing procedure with recent econometric analysis dealing with seasonality. A necessary condition for current account sustainability is that exports and imports are cointegrated. Following previous empirical studies (Husted 1992; Arize in Int Rev Econ Financ 11:101–115, 2002; Hamori in Appl Econ Lett 16:1691–1694, 2009), we analyze the long-run relationship linking exports and imports, using quarterly data. In contrast to these studies, we explicitly deal with seasonal effects through the use of periodic integration and cointegration and find a long-run relationship for the majority of the countries.

Keywords

Current account Time series Periodic integration  Periodic cointegration 

JEL Classification

F14 F32 C22 

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Tomas del Barrio Castro
    • 1
  • Mariam Camarero
    • 2
  • Cecilio Tamarit
    • 3
  1. 1.University of The Balearic IslandsPalmaSpain
  2. 2.University Jaume ICastellón de la PlanaSpain
  3. 3.University of ValenciaValenciaSpain

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