The Relationship Between Current Account Balance and Economic Growth: The Case of MINT Countries
Şu kitabın bölümü:
Çifçi,
İ.
&
Özbek Çifçi,
R.
İ.
(eds.)
2025.
Dynamics of Global Trade: Evolution, Policy, and Transformation.
Özet
This study examines the relationship between the current account balance and economic growth in MINT countries—Mexico, Indonesia, Nigeria, and Türkiye—using annual panel data for the period 1981–2019. Panel unit root tests indicate that the variables are stationary, allowing for long-run analysis. The existence of a long-run equilibrium relationship is tested using Pedroni, Kao, and Johansen–Fisher panel cointegration methods. Long-run coefficients are estimated through the Fully Modified Ordinary Least Squares (FMOLS) approach, while the direction of causality is analyzed using the Dumitrescu–Hurlin panel causality test. The findings reveal a significant long-run cointegration relationship between economic growth and the current account balance. FMOLS results show that economic growth positively affects the current account balance in the long run, and causality runs unidirectionally from growth to the current account. These results highlight the importance of considering external balance constraints in designing sustainable growth policies for emerging market economies.
