The link between government budget and current account in the Baltic countries

Piotr Misztal

MPRA Paper from University Library of Munich, Germany

Abstract: The main aim of the article is theoretical and empirical analysis of the causal relationship between the budget balance and the current account balance in the Baltic countries (Latvia, Lithuania and Estonia) in the period 1999-2010. In the paper are used methods based on the literature study of international economics and international finance as well as econometric methods (Vector Autoregressive Model - VAR). The results of investigation clearly point at the existence of negative relationship between fiscal and current account balances in the analyzed countries. At the same time it was revealed stronger impact of the current account balance on the government balance than the impact of the government balance on the current account balance in Latvia, Lithuania and Estonia

Keywords: government balance; current account; VAR model (search for similar items in EconPapers)
JEL-codes: F32 F41 H6 (search for similar items in EconPapers)
Date: 2012-01-03
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40784

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