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Context of external economic imbalances adjustments and long-term economic growth

Analýza souvislostí strukturální nápravy vnější ekonomické nerovnováhy a dlouhodobého ekonomického růstu

Jiří Pour

Český finanční a účetní časopis, 2020, vol. 2020, issue 1, 5-26

Abstract: Theoretically, external economic imbalance can be seen as an issue of chronic over-investment or under-saving of economies, and the process of correction may therefore be interpreted as a systematic movement of the national saving and investment rates towards their long-term equilibrium values. Such movement can be captured as a structural break in time series. We tried to empirically verify the long-term effects of the external imbalances adjustments on economic growth - namely whether structural breaks in the trend of relevant variables are related to the occurrence of structural breaks in GDP trend. The results suggest that the long-term adjustments of external economic imbalances are associated with a higher probability of negative GDP-trend breaks. However, no one-way causal effect was identified.

Keywords: External economic imbalance; Current account reversal; Savings; Investment; Structural breaks; Vnější ekonomická rovnováha; Obrat běžného účtu; Úspory; Investice; Strukturální zlomy (search for similar items in EconPapers)
JEL-codes: E21 E22 F32 (search for similar items in EconPapers)
Date: 2020
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Český finanční a účetní časopis, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3

DOI: 10.18267/j.cfuc.541

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