A. Misiunas, PhD, Associate Professor, R. Kregzdaite, Master of Economics, Vilnius University Assessment of conditions for the sustainability of the Baltic States balances’ of payments

One of the main statistical accounts reflecting the link with the world is the balance of payments, the analysis whereof allows making judgements about the efficiency of international economic activity and drawing upon it in the process of forming economical policy. With the opening up of possibilities to borrow on international markets, countries can maintain current account deficits; however, it increases external debt, and countries may be faced with currency or debt crises. The paper reviews an intertemporal solvency constraint model for the current account of the balance of payments; intertemporal solvency validity conditions for the Baltic States are derived and checked.

Keywords: balance of payments, current account, intertemporal solvency theory, cointegration, stationarity.

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