Open AccessSUSTAINABILITY OF CURRENT ACCOUNT DEFICITS IN BRICS COUNTRIES
Author(s) -
Serkan Taştan
Publication year - 2016
Publication title -
pressacademia
Language(s) - English
Resource type - Journals
ISSN - 2146-7943
DOI - 10.17261/pressacademia.2016219259
Subject(s) - sustainability , current (fluid) , current account , economics , natural resource economics , business , macroeconomics , engineering , biology , ecology , exchange rate , electrical engineering
In this article, sustainability of the current account deficit (CAD) for BRICS countries is analyzed in a nonlinear framework. In this respect, Harvey, Leybourne, and Xiao (2008) linearity test and the unit root tests of Sollis (2009) and Kruse (2011) are used. The analysis is based on the quarterly current account (CA) balances as percentages of gross domestic product. Results indicate that the CADs are unsustainable for Brazil and India. However, the sustainability hypothesis is valid for South Africa when considering size nonlinearity.
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