Testing the Sustainability of Current Accounts for Major South Asian Economies

South Asia Economic Journal Pub Date : 2018-03-01 DOI:10.1177/1391561418761064

Shruti Shastri, A. K. Giri, Geetilaxmi Mohapatra

引用次数: 8

Abstract

The study assesses the sustainability of current accounts for the panel of five major South Asian economies, namely, India, Pakistan, Bangladesh, Sri Lanka and Nepal for the period 1985–2016. Towards this end, the intertemporal solvency model of Hakkio and Rush (1991) and Husted (1992) has been employed. The panel co-integration test by Westerlund (2007) confirms the long-run relationship between exports and imports but the estimates of the slope coefficient based on GM-FMOLS, GM-DOLS and CCEMG turn out to be less than one indicating the weak sustainability. The weak form of sustainability implies that current account inflows are not equally matched by the outflows underscoring the need for policy interventions. An analysis of the other fundamentals, however, reveals that the non-consumption-dominated import structure, increasing export diversification and broadly declining external debt stocks are welcome signs for the external sustainability of the region. JEL: F30, F32

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测试南亚主要经济体经常账户的可持续性

该研究评估了1985年至2016年期间南亚五大经济体(印度、巴基斯坦、孟加拉国、斯里兰卡和尼泊尔)经常账户的可持续性。为此，本文采用了Hakkio和Rush(1991)以及Husted(1992)的跨期偿付能力模型。Westerlund(2007)的面板协整检验证实了出口和进口之间的长期关系，但基于GM-FMOLS、GM-DOLS和CCEMG的斜率系数估计值小于1，表明可持续性较弱。可持续性较弱意味着，经常账户流入与流出的比例并不相等，这凸显了政策干预的必要性。但是，对其他基本因素的分析表明，非消费占主导地位的进口结构、出口多样化的增加和外债存量的广泛下降是该区域外部可持续性的可喜迹象。Jel: f30, f32

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.