Table 4.

The effect of fiscal consolidation on current account

	Dynamic Panel Estimation SGMM
	(1)	(2)	(3)	(4)	(5)	(6)
${\mathit{CA}}_{it-1}$	1.136*** (0.238)	0.750*** (0.222)	0.808*** (0.214)	0.785*** (0.198)	0.797** (0.094)	0.772*** (0.208)
${\mathit{fa}}_{\mathit{it}}$	0.760** (0.324)	0.774*** (0.284)	7757** (0.322)	0.797 ** (0.327)	0.812** (0.333)	0.793** (0.323)
${\mathit{gdpg}}_{\mathit{it}}$		−0.183* (0.101)	0.147* (0.085)	0.190** (0.097)	0.219** (0.112)	0.164** (0.084)
${\mathit{corrp}}_{\mathit{it}}$			−0.131 (0.233)	−0.132 (0.359)	−0.906 (0.431)	−0.161 (0.338)
${\mathit{debt}}_{\mathit{it}}$				0.026 (0.178)	0.030 (0.025)	0.029 (0.023)
${\mathit{eldy}}_{\mathit{it}}$					−0.036 (0.108)	−0.118 (0.147)
${\mathit{young}}_{\mathit{it}}$						−0.111* (0.064)
N	207	206	184	184	184	184
groups	23	23	23	23	23	23
N-instr	6	8	9	10	11	12
AR(1)	0.019	0.054	0.044	0.039	0.049	0.048
AR(2)	0.570	0.606	0.561	0.544	0.545	0.525
Hansen	0.157	0.538	0.479	0.511	0.527	0.525

Robust standard errors are in parentheses. Regressions are based on the Blundell-Bond estimator. Starting from the most parsimonious specification (column 1), we progressively introduce GDP growth, corruption, public debt, eldy and young population in columns (2)–(6). Significance level at which the null hypothesis is rejected: p < 0.1*; p < 0.05**; p < 0.01***