Twin deficits in Morocco: An empirical investigation

Anas Mossadak

International Journal of Business and Social Research, 2013, vol. 3, issue 7, 160-172

Abstract: This paper investigates the hypothesis of twin deficits in Morocco. According to this theoretical concept, the budget deficit is the main cause of the current account deficit. The Empirical results obtained from the impulse responses analysis of the VAR model and the Granger-causality test indicate the existence of an unidirectional causality going from the current account deficit to the fiscal deficit. This implies the existence of reverse causality i.e. the current account deterioration is the main cause of the fiscal deficit in Morocco

Keywords: Fiscal Policy; Budget Deficit; Current Account; Twin deficits; VAR; Impulse responses (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:mir:mirbus:v:3:y:2013:i:7:p:160-172

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