Investície, fiškálna politika a bežný účet platobnej bilancie na Slovensku a v medzinárodnom porovnaní
INVESTMENT, FISCAL POLICY AND CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS IN SLOVAKIA IN INTERNATIONAL COMPARISON

Summary/Abstract: Globalization, capital flows, and growing fiscal and current account imbalances in a relatively large number of countries have motivated increasing research on these issues. The association of high external and internal deficits, which are generally referred to as twin deficits, has attracted increasing attention in the 1980s and the 1990s. Since the second half of the 1990s, this phenomenon has gained importance also in the transition economies of Central and Eastern Europe. For OECD countries, both current accounts and fiscal balances display a significant degree of hysteresis as shown by the unit root tests. Correspondingly, „twin deficits“ are defined as a cointegrating relationship be-tween the current account, the fiscal balance and investment. This paper contributes to the discussion of current account, capital markets integra-tion, and fiscal policy in the following ways. First, the paper analyzes the determinants of the long-run current account position in a broad set of countries including OECD coun-tries as well as emerging economies between 1970 and 2001. Second, quarterly data are applied in this paper, while the earlier comparative studies are based on annual data. Thus, the issue of parameter stability and nonstationarity can be addressed here, an issue most authors of comparative studies, have omitted. By contrast, several country studies have focused strongly on the properties of analyzed time series. Third, the paper considers both investment and the fiscal balance determinants of the current account in the long run, while the majority of the previous studies concentrated on only one of these factors. Various degrees of integration of the domestic economy to the international capital markets are found for the analyzed countries. In particular, the EU countries seem to finance a surprisingly high share of their domestic investment from international sources indicating that the so called Feldstein-Horioka puzzle (FHP) is less important in the EU. Finally, the paper extends the analysis to the development of the current account and the fiscal balance in transition economies in the 1990s, while also presenting evidence for selected countries for comparison. With few exceptions, this group of countries has been omitted from the analysis so far. The results show that twin deficits emerged in the 1980s. However, less evidence is documented for twin deficits in the 1990s. Furthermore, it is shown that the countries pursuing sustainable fiscal policies also display a high flexibility of the current account. As expected, investment contributed significantly to the current account deficit. Despite the increasing role of international financial markets, several countries are still financing their investment mainly from domestic sources (savings). This feature confirms earlier results on the FHP. However, less evidence for the FHP is found for the EU countries and also for transition economies (Hungary, Poland and Slovakia)...

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