Determinants of the Portuguese Current Account Balance
Determinants of the Portuguese Current Account Balance

Author(s): Elisabeth T. Pereira, Francisco Carvalho
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Current account; Government budget balance; PIB per capita; External deficit; Portugal
Summary/Abstract: The economic and financial crisis forced Portugal to adjust its external deficit, which had accumulated over almost two decades. This paper aimed to identify empirically the determinants of the Portuguese current account balance to understand the accumulation of the external deficit. For this purpose, several econometric estimations with the ARDL model and Granger causality tests were applied to quarterly macroeconomic data from 1999 to 2017. The results show that GDP per capita and the budget balance are the variables that most influence the formation of t he current account balance.

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