Impact of GDP volatility on current account balances

Michał Brzozowski () and Sadananda Prusty

No 2011-02, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: This paper empirically investigates the impact of GDP volatility on current account balances for a large sample of developed and developing countries. We extend the standard set of short- and long-term determinants of current accounts to include GDP volatility computed from the annual growth rate of GDP. It turns out that for low income countries the impact of GDP volatility on their current account balances is negative, whereas the reverse is true for high income countries. The intertemporal approach to the balance of payments followed in this paper suggests that a diverse response of current account balances to GDP volatility can be due to the different degree of shock persistence in developed and developing countries.

Keywords: current account; savings; investment; volatility (search for similar items in EconPapers)
JEL-codes: C33 F32 F41 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011
New Economics Papers: this item is included in nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP42.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: Impact of GDP volatility on current account balances (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2011-02

Access Statistics for this paper

More papers in Working Papers from Faculty of Economic Sciences, University of Warsaw Contact information at EDIRC.
Bibliographic data for series maintained by Marcin Bąba ().