THE TWIN DEFICITS IN SELECTED CENTRAL AND EASTERN EUROPEAN ECONOMIES: BOUNDS TESTING APPROACH WITH CAUSALITY ANALYSIS
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Date
2014
Authors
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Journal ISSN
Volume Title
Publisher
inst Economic Forecasting
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Abstract
The aim of our paper is to explore empirically the existence of the long-run relationship and the direction of causality between the budget and current account deficits for some selected Central and Eastern European economies. Bulgaria, Latvia, Lithuania, Poland, Romania, Serbia and Slovenia are the sample countries. The empirical analysis hinges on the Pesaran, Shin, and Smith (2001) bounds testing approach to co-integration and Granger non-causality. No evidence in favor of twin deficits hypothesis has been obtained for the selected countries, except for Bulgaria, as the results support non-causality.
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Keywords
budget deficit, current account deficit, twin deficits hypothesis, bounds testing, Granger non-causality
Turkish CoHE Thesis Center URL
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Citation
10
WoS Q
Q4
Scopus Q
Q2
Source
Volume
17
Issue
2
Start Page
141
End Page
160