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The Australian Trade Balance and Current Account: a Time Series Perspective

Philip Bodman

International Economic Journal, 1997, vol. 11, issue 2, 39-57

Abstract: This paper examines the dynamic relationship between Australian imports and exports in both the short and long-run using recent cointegration and error-correction techniques. The analysis has direct implications over the specification and estimation of Australian import and export functions and resulting elasticity estimates. The paper also addresses the issue of sustainability of persistent current account deficits in the Australian context and provides a test of whether Australia is satisfying its intertemporal (or present value) budget constraint (IBC).

Date: 1997
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DOI: 10.1080/10168739700000010

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