Examining the “Balance of Payments Stages” Hypothesis

Masanori Ono

Global Economy Journal, 2014, vol. 14, issue 3-4, 373-397

Abstract: This paper classifies 175 countries over a period of just 30 years according to the balance of payments stages that are frequently used in proposing a hypothesis that the stage depends on the progression in a nation’s development. Using a nonparametric estimation, this investigation demonstrates that a nation’s stage in the balance of payments has a non-monotonic relationship with its economic development and that a country at the stage of immature creditor–lender enjoys a higher GDP per capita than at any other stage in its development. Another notable finding is that a lending country produces about twice the GDP per capita that a borrowing one does and that about 25% of countries in the world lend money to the rest of the world in nearly every year.

Keywords: GDP per capita; creditor; debtor; multiple comparisons (search for similar items in EconPapers)
JEL-codes: F30 F43 O11 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1515/gej-2014-0016

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