No. 485: An Investigation of Current Account Solvency in Latin America Using Non Linear Stationarity Tests
Georgios Chortareas University of Connecticut George Kapetanios Queen Mary, University of London Merih Uctum City University of New York
January 1, 2003
Abstract
Using a new methodology that allows for nonlinearities, we find frequent support for sustainability in the debt of a set of Latin American countries. Our findings overturn results obtained with traditional unit-root tests and provide a more realistic alternative to evaluate the external solvency of an economy.
J.E.L classification codes: C22, F32, F34
Keywords: Current account, Nonlinearity