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Twin deficits in Cambodia: Are there Reasons for Concern? An Empirical Study

Evan Lau () and Tuck Cheong Tang ()

No 11-09, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This study examines the inter-linkages between Government budget balance, and external balance for a transition economy in South East Asia – Cambodia. The empirical results of the quarterly data between 1996 and 2006, support twin deficits hypothesis that is the budget deficits do cause external deficits, in the short run. These two macroeconomics variables are moving together in the long run. For implication, these findings provide an insight for the Cambodia’s policy design and formulation.

Keywords: Budget Deficits; Cambodia; Current Account Deficit; Unit Root Tests (search for similar items in EconPapers)
JEL-codes: F32 H62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sea
Date: 2009-08
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