Sustainability of external imbalances in the OECD countries

1. Bajo Rubio, Oscar
2. Díaz Roldán, María del Carmen
3. Esteve, Vicente

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More publications in: Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía

Abstract

In this paper, we provide a test of the sustainability of externa! imbalances in the OECD countries, over the years 1970-2007. Specifically, we deal with the case of those countries that have experienced current account deficits in more than half of the years throughout the period of analysis, and address the recent critique of Bohn (2007) on unit root and cointegration tests of the intertemporal budget constraint.

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