Testing Brazilians` Imports and Exports Co-Integration With Monthly Data For 1996-2005

Gilberto Hollauer and Marco Mendonça

No 1154, Discussion Papers from Instituto de Pesquisa Econômica Aplicada - IPEA

Abstract: The goal of this paper is to test the Husted model and to inspect the long-runsustainability of Brazilian current account in a very specific period of time (1996-2005) by the use of monthly data. We have tested the inter-temporal budgetconstraints (IBC) condition via unit root test with structural break and co-integrationthrough Gregory-Hansen test in a 117 long nominal, GDP normalized and CPInormalized series for the Brazilian economy. The results indicated that the pure IBCcondition does not hold for the Brazilian economy. However, there is co-integrationamong the series used in this work and the balance of accounts is sustainable.

Pages: 17 pages
Date: 2006-01
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Persistent link: https://EconPapers.repec.org/RePEc:ipe:ipetds:1154

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