Sustainability of balancing item of balance of payment for OECD countries: evidence from Fourier Unit Root Tests

Abstract

In this paper, the sustainability of the balancing item of balance of payments is examined for 33 OECD (Organization for Economic Co-operation and Development) member countries. The sample period of each country is dependent upon the availability of data and Fourier unit root tests are employed in analysis. According to the empirical analysis the balancing item of balance of payments is sustainable for Australia, Canada, Hungary, Norway, Switzerland and United States. The results also show that nonlinearity is essential characteristic for the balancing item of balance of payments.

Keywords

• Balancing item of balance of payments
• net errors and omissions
• sustainability
• Fourier unit root test
• nonlinearity