Much of the empirical evidence on developing economies indicates that the basic intertemporal model of the current account fails to predict the dynamics of the actual current account series. This article argues that the model can predict the dynamics of the current account series if it is...

This article uses the Solow growth model and the panel data method to examine the effect of trade liberalization and the federal equalization transfers on income convergence among Canadian provinces between 1981 and 2006. Estimation problems of weak instruments and endogenous regressors are...