EconPapers    
Economics at your fingertips  
 

Global aspects of the twin deficit hypothesis

Maria Panova

Economic Thought journal, 2018, issue 5, 99-116

Abstract: The twin deficit hypothesis, which explores the causal link between the budget deficit and the current account deficit, is put to the test for a sample of 188 countries for the period 1980-2014. The obtained results show that there is a complex impact on the current account dynamics, which cannot be explained solely by the dynamics of a single variable, or, if it is possible, then this variable is not the budget balance. It is found that the average budget balance is positive in only 36 countries (it is negative in the remaining 152 countries), ergo, the twin deficit hypothesis is confirmed. This is also supported by the VAR analysis - the double deficit hypothesis is valid for all groups of coefficients except those of Tuvalu, Lebanon, Eritrea and Equatorial Guinea, which have extreme coefficients (above -10).

JEL-codes: F32 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://www.ceeol.com/search/article-detail?id=699753
Fee access (Bulgarian)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bas:econth:y:2018:i:5:p:99-116

Access Statistics for this article

More articles in Economic Thought journal from Bulgarian Academy of Sciences - Economic Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by Diana Dimitrova ().

 
Page updated 2018-10-11
Handle: RePEc:bas:econth:y:2018:i:5:p:99-116