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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.descriptionYes
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.rights© 2015 The Authors. Full-text reproduced with author permission.en_US
dc.subjectSpain
dc.subjectPortugal
dc.subjectGreece
dc.subjectInternational financial integration
dc.subjectTwin deficits
dc.subjectFeldstein-Horioka
dc.subjectARDL co-integration
dc.subjectFiscal balances
dc.subjectCurrent account balances
dc.titleAn Empirical Analysis of the Nexus between Investment, Fiscal Balances and Current Account Balances in Greece, Portugal and Spainen_US
dc.status.refereedYes
dc.typeReport
dc.type.versionPublished version
refterms.dateFOA2018-07-26T09:13:55Z
dc.relation.urlhttp://openaccess.city.ac.uk/14074/
dc.openaccess.statusopenAccess


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