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| Volume 7, No. 1,
April 2008 |
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New Evidence on US Current
Account Sustainability |
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Juncal Cuñado |
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Department of Economics,
Universidad de Navarra, Spain |
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Luis Alberiko Gil-Alana |
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Department of Economics,
Universidad de Navarra, Spain |
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Fernando Perez de Gracia |
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Department of Economics,
Universidad de Navarra, Spain |
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| Abstract |
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This paper deals with the
sustainability of the US current account using fractional
integration. We examine nominal and real exports and imports and
their corresponding values deflated by GNP. The results show that
only the variables deflated by GNP may contain unit roots, while
nominal and real exports and imports are integrated of order
d with
d>1. In addition, the
differences between export and imports are also nonstationary. The
possibility of structural breaks is also considered. |
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Key words:
current account; fractional integration; long memory |
| JEL
classification:
C22; F32 |
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