On the Solvency of Nations : Are Global Imbalances Consistent with Intertemporal Budget Constraints? »
Series: IMF Working Papers
Author(s): Enrique Mendoza , Marco Terrones , and Ceyhun Bora Durdu
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 February 2010
Keywords: external solvency, Poled Mean Group estimation, foreign assets, net foreign assets, equation, statistics, industrial countries, Open Economy Macroeconomics, General Outlook and Conditions,
Theory predicts that a nation's stochastic intertemporal budget constraint is satisfied if net exports (NX) and net foreign assets (NFA) satisfy an error-correction specification with a residual integrated of any f...