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dc.contributor.authorPilbeam, K.*
dc.contributor.authorLitsios, Ioannis*
dc.date.accessioned2016-11-23T16:25:32Z
dc.date.available2016-11-23T16:25:32Z
dc.date.issued2015
dc.identifier.citationPilbeam K and Litsios I (2015) An Empirical Analysis of the Nexus between Investment, Fiscal Balances and Current Account Balances in Greece, Portugal and Spain. Report No. 15/18. London, UK: Department of Economics, City University London.en_US
dc.identifier.urihttp://hdl.handle.net/10454/10493
dc.descriptionYesen_US
dc.description.abstractWe provide new evidence that current account balances in Greece, Portugal and Spain have become non-stationary after the adoption of the euro implying that there is no long-run stable relationship between savings and investment contrary to the Feldstein-Horioka puzzle. This can be taken as evidence of unsustainable current account balances and loss of solvency for the underlying economies. Using the ARDL methodology we also report a statistical association between fiscal balances and current account balances which implies that fiscal austerity can help these economies to reduce their current account deficits and restore their competitiveness. Our empirical evidence also suggests a particularly strong significant negative association between domestic investment and current account deficits. The magnitude of this latter effect may have important policy implications concerning the ways in which investment is financed to improve external competitiveness.en_US
dc.language.isoenen_US
dc.relation.isreferencedbyhttp://openaccess.city.ac.uk/14074/en_US
dc.rights© 2015 The Authors. Full-text reproduced with author permission.en_US
dc.subjectSpain; Portugal; Greece; International financial integration; Twin deficits; Feldstein-Horioka; ARDL co-integration; Fiscal balances; Current account balancesen_US
dc.titleAn Empirical Analysis of the Nexus between Investment, Fiscal Balances and Current Account Balances in Greece, Portugal and Spainen_US
dc.status.refereedYesen_US
dc.typeReporten_US
dc.type.versionPublished versionen_US
refterms.dateFOA2018-07-26T09:13:55Z


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