RDP 2007-11: Global Imbalances and the Global Saving Glut – A Panel Data Assessment Appendix C: Further Results

Anthony Legg, Nalini Prasad and Tim Robinson

November 2007

In the models below we include the real exchange rate or China in the Asian crisis.

Table C1: Estimation Results
Dependent variable is the current account to GDP ratio
Original Including the real exchange rate Including China in the Asian crisis
2SLS 2SLS 2SLS
(CA/GDP)it–1 0.10
(0.17)		 0.13
(0.17)		 0.10
(0.17)
(CA/GDP)it–2 −0.24***
(0.05)		 −0.23***
(0.05)		 −0.24***
(0.05)
crisisit 0.27
(0.90)		 0.20
(0.89)		 0.30
(0.89)
crisisit–1 2.24**
(1.04)		 1.66
(1.02)		 2.11**
(1.04)
crisisit–2 1.98*
(1.07)		 1.61
(1.05)		 1.85*
(1.07)
crisisit–3 −0.07
(1.09)		 −0.23
(1.07)		 −0.11
(1.08)
crisisit–4 0.16
(0.87)		 −0.17
(0.86)		 0.06
(0.86)
dependencyratioit −45.79***
(17.48)		 −48.68***
(17.08)		 −46.75***
(17.41)
fiscalbalanceit 0.33***
(0.05)		 0.34***
(0.05)		 0.32***
(0.05)
termsoftradeit 0.10***
(0.02)		 0.09***
(0.02)		 0.10***
(0.02)
termsoftradeit–1 0.08***
(0.02)		 0.07***
(0.02)		 0.08***
(0.02)
financialdeepnessit −1.25
(0.94)		 −1.43
(0.94)		 −1.29
(0.94)
growthforecastsit −1.55**
(0.67)		 −1.65**
(0.67)		 −1.57**
(0.67)
institutionsit −4.72***
(1.00)		 −4.65***
(0.98)		 −4.78***
(1.00)
institutionsit*growthit 0.21**
(0.11)		 0.23**
(0.11)		 0.21**
(0.11)
ongoingcrisisit*growthit 0.16
(0.18)		 0.16
(0.18)		 0.19
(0.17)
financialdeepnessit*growthit 0.07
(0.16)		 0.10
(0.16)		 0.09
(0.16)
realexchangerateit   −0.007
(0.01)		  
realexchangerateit–1   −0.07***
(0.01)		  
R2 0.40 0.42 0.40
Number of observations 443 443 443
Instruments Δ(CA/GDP)it–3 Δ(CA/GDP)it–3 Δ(CA/GDP)it–3
Arellano-Bond test (p-value) for second-order autocorrelation 0.76 0.27 0.76
Notes: Robust standard errors are shown in brackets. ***, ** and * denote significance at the 1, 5 and 10 per cent levels respectively. Fixed effects are not reported.