No. 485: An Investigation of Current Account Solvency in Latin America Using Non Linear Stationarity Tests
January 1, 2003
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