Sustainability of current account balances in small states

• Jeetendra Khadan ^[1] ; Amrita Deonarine ^[2]
  1. [1] Caribbean Department, Inter-American Development Bank, US
  2. [2] Independent Senator, Parliament of Trinidad and Tobago, Trinidad and Tobago
• Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 9, Nº. 1, 2020, págs. 14-20
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • This article applies the inter-temporal budget constraint framework and panel cointegration tests to examine the sustainability of current account deficits in 17 small states over the period 1995-2016. The findings show the existence of cointegration between real exports and real imports, but with the magnitude of the long-run coefficient being less than one, which support a “weak” form of current account sustainability in small states.