Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
968368 | Journal of Policy Modeling | 2008 | 16 Pages |
Abstract
Egypt has presented important budget imbalances. This paper tries to evaluate whether Egypt's public deficit has had any impact on current account imbalances, examining the validity of the twin-deficit hypothesis for Egypt. We conclude for the presence of a (weak) long-run relationship between the budget deficit and the current account deficit. Yet, we reject the twin-deficit hypothesis: we found evidence in favour of a reverse Granger-causality running from the external deficit to the budget deficit. Further, we conclude against the validity of full Ricardian equivalence in Egypt and present evidence in favour of a high degree of capital mobility.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Carlos Fonseca Marinheiro,