SUSTAINABILITY OF ‘NET ERRORS AND OMISSIONS’ OF BALANCE OF PAYMENTS – WITH GLOBAL RESULTS

Abstract

This study farewells the previous studies by (re-)examining the sustainability of ‘net errors and omissions’ (NEO) for 98 countries with sample periods between 1966 and 2016. The 11 time-series unit root (stationary) tests suggest that all sample countries have their sustainable NEO. The panel unit root tests support this finding. This study also explores that the income group does not determine the ‘fitness’ of NEO sustainability, but the institutional quality does.