Dynamics of capital account and current account in Sri Lanka

This paper enquires the dynamics of current account and capital account in Sri Lanka for the period 2001:Q1 to 2016:Q1 and also examines the role of some policy variables such as exchange rate and interest rate in this dynamics. Estimated autoregressive distributed lag (ARDL) bound testing approach to cointegration followed by error correction representation of the ARDL model have found that current account is caused by capital account and exchange rate, where capital account causes to produce a deficit in current account. In the dynamic adjustment of current account due to exchange rate, an evidence of J-curve phenomenon is noticed. Capital account is neither caused by current account nor by exchange rate but interest rate has a positive impact on it. Robustness of these findings is testified by the vector autoregression model, Wald test of Granger causality followed by an impulse response analysis and a variance decomposition analysis. These analyses, in addition, establish a negative impact of interest rate on current account. With the best of knowledge this is the first study that reveals the dynamics of current and capital account of Sri Lanka. Such a dynamics is critical from the policy perspective. Policy makers should caution before capital account liberalization.     

Semi-parametric predictions of the intertemporal approach to the current account

This paper uses the method dynamic programming (DP) by GMM and Canadian data to estimate a dynamic model of a small-open economy. DP by GMM has several appealing features: it does not impose certainty equivalence, it accommodates multiple shocks and imposes few restrictions on the properties of the shocks in the model. Also, since it uses the actual shocks series to estimate approximate decision rules, it produces sample paths for the endogenous variables in the model. The model estimated fits the data well. In particular, the variance of the predicted trade balance-output ratio matches its empirical counterpart.     

The structure and sustainability of current account deficit: Turkish evidence from regime switching

This study focuses on the current account deficit dynamics and sustainability, using data of the period between 1990:Q1 and 2014:Q2 in the context of Turkish economy. The main findings of the study can be put into two categories. The first category covers energy consumption, openness rate, gross domestic product, exchange rate and investments, which are the most important determinants of the current deficit. The second one asserts that sustainability is weak for Turkish economy; however, it is even weaker during the economic contraction. There is extensive literature about structure and sustainability of the current account deficit. However, many of the studies have analysed the sustainability of the current account deficits without considering the economic conjuncture. For this purpose, the study employs the Markov-switching method which is a non-linear time series model.     

Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration

This paper provides an empirical investigation of the medium-term determinants of current accounts for a large sample of industrial and developing countries, utilizing an approach that highlights macroeconomic determinants of longer-term saving and investment balances. Cross-section and panel regression techniques are used to characterize the variation of the current account across countries and over time. We find that current account balances are positively correlated with government budget balances and initial stocks of net foreign assets. Among developing countries, measures of financial deepening are positively associated with current account balances while indicators of openness to international trade are negatively correlated with current account balances.     

Foreign direct investment,technology transfer and domestic employment effects

The paper investigates the relationship between foreign direct investment and domestic employment opportunities within the context of a multinational firm which is involved in transferring technology from its domestic to its foreign operations. The transfer of technology takes the form of a managerial input, which reflects the benefits of learning-by-doing acquired through cumulative gross domestic investment, in the foreign production function. The model predicts a positive domestic employment effect over the longer run because of a favorable interaction which is generated between the firm's domestic and foreign operations as a result of the transfer of managerial expertise.     

浅谈新形势下的商业银行存款及其账户管理

新形势下加强商业银行的存款及账户管理是金融监管的重点,对于维护金融秩序,化解金融风险都有重要意义。本文介绍了新形势下的商业银行存款成本控制的现状,新形势下商业银行存款产品创新形式的扩展,以及新形势下的商业银行账户管理的监管措施。     

How investor behavioral factors influence investment satisfaction, trust in investment company, and reinvestment intention

The purpose of this study is to provide strategic implications for the marketing revitalization of real state. By sampling investment behavioral factors of investors in the Gumi area of South Korea (ROK), which is emerging as a promising investment area, the study shows their effects on investment satisfaction, investment firm trust, and intention to reinvest. The behavioral factors, adopted from previous studies, are profitability investment stability, investment regulations, investment location, and investment well-being. Location proves to be the most important factor in investment satisfaction, followed by liquidity, profitability, and well-being. In addition, the structural relativity of satisfaction to reinvestment intention and trust in the investment firm has positive effects. The results of the study reinforce major characteristics for a real estate marketer to consider and provide insights for future studies.     

Impact of services trade on economic growth and current account balance: Evidence from India

This paper aims to study the impact of services trade on India’s economic growth and current account balance during the post-reform period. Earlier studies on this subject have mostly looked at the goods sector. Indian studies which analysed services-led growth from a balance of payments perspective suffered from a bias of having focused only on call-centre exports. In such a context, this study brings in a novel approach by using the Balance of Payments Constrained Growth model and autoregressive distributed lag cointegration to estimate the balance of payments equilibrium growth rate for India’s service sector. The key service sub-sectors are also identified using input–output tables and the TIVA database. This study finds that India’s service sector is growing at a rate almost equal to its balance of payments equilibrium growth rate under the assumption of constant relative prices in international trade, and at a rate lower than the equilibrium growth rate when this assumption is relaxed. Among the major services in India’s export basket, construction, transport and business services are found to exhibit strong backward linkages. Foreign value-added content in India’s services exports is found to be highest in the case of business services, transport services and telecommunications.     

Current account sustainability in G7 and BRICS: Evidence from a long-memory model with structural breaks

In this paper, we extend the existing literature on current account sustainability by examining the relevance of long memory and structural breaks in modelling the dynamics of current account to gross domestic product (GDP) ratios in G7 and BRICS. Unlike standard unit root tests, which have low power, especially in cases where the series is characterized by a fractional process, the long-memory approach provides an exact measure of the degree of persistence. However, long-memory models are known to overestimate the degree of persistence of the series in the presence of structural breaks. We show that regime changes do exist in both the mean and trend of the current account to GDP ratios. Thus, we test persistence allowing for both smooth and sharp breaks. Our methodology also allows any number of sharp breaks, whereas standard unit root tests only permit either one or two breaks. Hence, our approach is more general and more robust to misspecifications caused by the omission of breaks than standard methods. We show that current accounts are sustainable in both groups of countries, with the G7 and South Africa displaying long-memory behaviour.     

美国国际收支结构的特征、趋势分析及对中国的启示

美国日益增长的经常项目赤字和庞大的净对外债务已经成为影响世界经济的一个不确定因素。长期来看,以亚洲国家为外围主体为美国经常项目赤字融资这一复活的布雷顿森林体系难以长久存在,因而以“逆差+顺差”为特点的美国国际收支结构是很难持续的,美国的经常项目很可能会经历一次趋向平衡的调整过程。同时指出了中国对美国经常项目调整可能给中国经济发展带来冲击的应对措施。     

Defaultable debt, interest rates and the current account

World capital markets have experienced large scale sovereign defaults on a number of occasions. In this paper we develop a quantitative model of debt and default in a small open economy. We use this model to match four empirical regularities regarding emerging markets: defaults occur in equilibrium, interest rates are countercyclical, net exports are countercyclical, and interest rates and the current account are positively correlated. We highlight the role of the stochastic trend in emerging markets, in an otherwise standard model with endogenous default, to match these facts.     

基于有界检验方法的外商投资与我国就业效应的实证分析

采用自回归分布滞后模型(ARDL)和Pesaran等有界检验(boundtest)方法,对我国外商直接投资(FDI)与就业的长、短期关系进行了协整估计。结果表明,从长期来看,FDI对就业具有一定的负面作用,但在短期内,对就业具有比较明显的扩大作用。从就业的角度看,针对FDI要采取更加审慎的政策,充分考虑其动态影响,趋利避害。     

Composition and growth effects of the current account: A synthesized portfolio view

This paper analyzes a useful accounting framework that breaks down the current account to two components: a composition effect and a growth effect. We show that past empirical evidence, which strongly supports the growth effect as the main driver of current account dynamics, is misconceived. The remarkable empirical success of the growth effect is driven by the dominance of the cross-sectional variation, which, under conditions met by the data, is generated by an accounting approximation. In contrast to previous findings that the portfolio share of net foreign assets to total assets is constant in a country, both our theoretical and empirical results support a highly persistent process or a unit-root process, with some countries displaying a trend. Finally, we reestablish the composition effect as the quantitatively dominant driving force of current account dynamics in the past data.     

我国经常项目收支平衡与经济增长——基于BPCG模型的实证分析

20世纪90年代初以来,我国经常项目中商品贸易持续顺差,服务贸易和投资收益账户却连年逆差,这种结构不利于我国经济的持续稳定增长。本文应用国际收支约束下经济增长模型(BPCG)及其扩展形式,实证分析了1982-2005年间我国经常项目平衡约束下的经济增长率、商品贸易收支平衡约束下的经济增长率与实际增长率之间的差异,结论为经常项目平衡约束下的经济增长率比商品贸易收支平衡约束下的经济增长率要低0.5-1个百分点。     

The real dollar-yen exchange rate,asymmetries in trade flows and the current account in a perfect-foresight model for developing East Asia

This paper explores permanent, unanticipated shocks in the yen-dollar exchange rate in a perfect-foresight, infinite-horizon, representative-agent model for an open, semismall economy that produces a single good, imports intermediate inputs and investment goods from Japan and competes with Japan in external markets. Therefore, the model captures some of the features of the developing countries of East Asia. External debt is constrained by a country-risk premium that depends on the level of external debt. The capital stock is maintained and incremented by an endogenous mixture of Japanese and home goods. An appreciation of the dollar against the yen is neutral for external indebtedness and the trade account in the long run, but raises the capital stock, consumption and hence welfare in the long run; the home currency depreciates against the dollar but appreciates against the yen. Whether a cycle of current account surpluses followed by current account deficits or vice versa is generated depends on the initial response of the shadow value of external debt.     

外商直接投资与农业产业安全——基于国内投资与就业挤出效应视角的实证研究

基于国内外的研究成果,提出一种研究外商直接投资对我国农业产业安全影响的新思路。一方面,选用1997年至2009年的相关时间序列数据,构造了联立方程模型,分别利用二阶段最小二乘法(2SLS)和普通最小二乘法(OLS)估计了农业引入外商直接投资对国内投资和就业所产生的挤出效应。实证结果显示,农业实际利用外商直接投资金额增加1%将导致0.2%的国内投资和0.01%的农业就业被挤出;另一方面,基于国内投资与就业挤出效应视角,针对外商直接投资对我国农业产业安全可能产生的影响提出了相应的对策。     

Spillovers from foreign direct investment and firm growth: technological,financial and market structure effects

This article examines spillover effects from inward investment on domestic firm growth in the case of a developed host country. The emphasis is placed on the role of the technological gap between domestic and foreign firms in identifying the importance of technology diffusion from the presence of multinationals. An augmented production function is employed to account for technological, financial and market structure effects. Based on a sample of 2589 manufacturing firms operating in Greece between 1992 and 1997, the analysis provides evidence that the significance of spillovers varies with the relative technological position of domestic firms and is higher in the middle and upper quantiles of the growth distribution. It was estimated that a unit increase in the foreign presence in Greek industry raises output growth by 7% on average, in a five‐year period, after controlling for technological differences among firms. This result is consistent with the ‘absorptive capacity’ hypothesis that the technological capability of the host country relates positively to FDI spillover benefits.     

Financial integration, productivity and capital accumulation

Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investment. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I also control for indirect effects of financial globalization through financial development and banking and currency crises. While financial integration does not systematically increase domestic financial depth, it may raise the likelihood of banking crises, though only to a minor extent. Yet, the overall effect of financial liberalization remains positive for productivity and negligible for investment.     

Dynamics of the current account and interest differentials

In contrast to earlier work, we study the relation between the current account and the interest rate differential. To do so, we document the relation for international data. We then interpret this relation from a two-country, dynamic, general equilibrium model, where a financial intermediary faces operating costs that are increasing and convex in the volume of internationally intermediated funds. We finally confront the relation predicted by the model to the relation observed in the data. We find that the model correctly predicts that the current account is negatively correlated with current and future interest differentials, but positively correlated with past interest differentials; that the current account is countercyclical; and that the interest differential is procyclical.     

Expansion of the public sector,the current account and the exchange rate

Attributing the foreign trade effects of an expansion in the state budget to a single cause cannot do justice to the multitude of macro-economic interrelationships. Both theory and observation can reveal quite differing links between the public sector financial balance, the balance of payments and the exchange rate. The financing and nature of additional budgetary expenditure and the pattern of private investors’ expectations therefore have to be taken into consideration to obtain a clear picture of the possible consequences of budgetary expansion.