Mean Reversion of Balance of Payments¡GEvidence from Sequential Trend Break Unit Root Tests

Mei-Yin Lin () and Jue-Shyan Wang ()
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Mei-Yin Lin: Department of Economics, Shih Hsin University
Jue-Shyan Wang: Department of Public Finance, National Chengchi University

Economics Bulletin, 2008, vol. 6, issue 4, pages 1-10

Abstract: We analyze the G7 countries data set of real balance of payments series. The unit root tests with an endogenously determined break date in the trend function proposed by Zivot and Andrews (1992) is employed to characterize the balance of payments series. The empirical results show that allowing for a break in the trend function could alter the outcome of the standard unit root tests for some series.

Keywords: Balance of payments; Random walk; Structural Break (search for similar items in EconPapers)
JEL-codes: F4 C2 (search for similar items in EconPapers)
Date: 2008-01-31

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