Subscribe Now Subscribe Today
Science Alert
 
Blue
   
Curve Top
Journal of Applied Sciences
  Year: 2009 | Volume: 9 | Issue: 19 | Page No.: 3606-3608
DOI: 10.3923/jas.2009.3606.3608
 
Facebook Twitter Digg Reddit Linkedin StumbleUpon E-mail

Random Walk or Mean Reversion of Balance of Payments in OECD Countries: Evidence from Panel Data

F. Kula, A. Aslan and O. Gozbasi

Abstract:
Mean Reversion of Balance of Payments (BOP) is analyzed by panel data methodology using the first generation (Im, Pesaran and Shin’s and Levin, Lin and Chu t-test) and the second generation (cross-sectional augmented ADF statistics) unit root tests on 24 OECD countries over the years ranging from 1982 to 2007. Both of the cross-sectional independence and cross-sectional dependence test results we obtained illustrate that BOP is mean reverting. It follows that the BOP will return to its trend path over time and the assumption of Mundell-Fleming model will be validated. These findings provide strong evidence for the assumption of Mundell-Fleming model.
PDF Fulltext XML References Citation Report Citation
How to cite this article:

F. Kula, A. Aslan and O. Gozbasi, 2009. Random Walk or Mean Reversion of Balance of Payments in OECD Countries: Evidence from Panel Data. Journal of Applied Sciences, 9: 3606-3608.

DOI: 10.3923/jas.2009.3606.3608

URL: https://scialert.net/abstract/?doi=jas.2009.3606.3608

COMMENT ON THIS PAPER
 
 
 

 

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 

Curve Bottom