scholarly journals Financial integration, euro and the twin deficits of southern Eurozone countries

2013 ◽  
Vol 60 (2) ◽  
pp. 161-178 ◽  
Author(s):  
Nikolina Kosteletou
Keyword(s):  
Fiscal Policy ◽  
Panel Data ◽  
Empirical Analysis ◽  
Current Account ◽  
Financial Integration ◽  
Twin Deficits ◽  
Euro Zone ◽  
The North ◽  
The Relationship ◽  
Current Account Balances

The purpose of this study is the examination of the relationship between fiscal and Current Account balances for the countries of southern eurozone. The twin deficit hypothesis is tested within the context of a portfolio model involving variables from the financial sector. Empirical analysis is conducted with panel data, for the period 1991-2011. Evidence is provided to support the twin deficit hypothesis. Additionally, it is found that it is not only the fiscal policy of the southern eurozone countries that affects their Current Account balances, but also the fiscal policy of the eurozone surplus countries of the north. Interdependence of euro-zone countries suggests that fiscal policy can be used for the elimination of external disequilibrium. Therefore, fiscal policy should be coordinated but not uniformly applied.

scholarly journals An Empirical Analysis of the Relationship Between Urbanization and Fiscal Policy --- Taking Jiangxi Province of China As an Example

2018 ◽  
Vol 10 (2) ◽  
pp. 140 ◽  
Author(s):  
Xiao-Ying Wan
Keyword(s):  
Fiscal Policy ◽  
Empirical Analysis ◽  
Impulse Response Function ◽  
Jiangxi Province ◽  
Vector Autoregressive ◽  
Dynamic Correlation ◽  
Existing Problems ◽  
Fiscal Revenue ◽  
The Impact ◽  
The Relationship

Urbanization is still the direction of China's development in the next twenty years. The study of the relationship between fiscal policy and urbanization is of great value to the healthy promotion of urbanization. In this paper, through the establishment of vector autoregressive model, and analysis using the impulse response function and variance decomposition empirical dynamic correlation between the development of urbanization in Jiangxi province and that of fiscal policy, fiscal policy focus; at the same time, this thesis employs qualitative analysis and quantitative analysis, normative analysis and empirical analysis, combined with the reality of the development of urbanization in Jiangxi Province in order to analyze of the relationship between the development of urbanization in Jiangxi province and fiscal policy and the existing problems. The study found that there is a cointegration relationship between fiscal policy and urbanization. The impact of fiscal expenditure on Urbanization in Jiangxi is better than that in fiscal revenue. Finally, this paper also puts forward relevant policy.

scholarly journals Decomposition of external capital inflows and outflows in the small open transition economy: The case analysis of the Slovak Republic

2008 ◽  
Vol 55 (2) ◽  
pp. 219-231 ◽  
Author(s):  
Rajmund Mirdala
Keyword(s):  
Current Account ◽  
Transition Economy ◽  
Financial Integration ◽  
Slovak Republic ◽  
Case Analysis ◽  
Capital Inflows ◽  
Financial Assets ◽  
External Capital ◽  
Current Account Balances

The main objective of the proceeding is to perform a logical decomposition of the structure of external capital inflows and outflows in the Slovak republic in order to analyze the main trends in the external financial integration and its development through the period of 1994-2006. In order to fulfill our objective we observe the changes in the structure of external financial assets and liabilities in order to provide the explanation of main trends in the external capital portfolio of the Slovak republic. Finally, we explore the implications of the accumulated stock of external capital for future trade and current account balances. .

scholarly journals The Twin Deficits Phenomenon: Evidence from Pakistan

2000 ◽  
Vol 39 (4II) ◽  
pp. 535-550 ◽  
Author(s):  
Anjum Aqeel ◽  
Mohammed Nishat
Keyword(s):  
Fiscal Policy ◽  
Current Account ◽  
Budget Deficit ◽  
Current Account Deficit ◽  
Theoretical Work ◽  
Current Account Balance ◽  
Improved Performance ◽  
Necessary And Sufficient ◽  
The Relationship ◽  
The Current Account

Like most developing countries a steady budget deficit in Pakistan is the primary cause of all major ills of the economy. It has varied between 5.4 to 8.7 percent during last two decades. On the other hand the current account deficit varied between 2.7 to 7.2 percent during the same period. The variations in fiscal policy can lead to predictable developments in an open economy’s performance on current account, remains a controversial issue. An important aspect of this issue concerns what is termed as twin deficit analysis, according to which fiscal deficits and current account balances are very closely related so that reductions in the former are both necessary and sufficient to obtain improved performance in the later. Theoretical work on the relationship that exist between variations in fiscal policy and the current account balance has been based upon two types of models. These models are constructed from postulated behavioural relationships that purport to describe how the economy works in aggregate without explaining the behaviour of agents who make up the economy [Mundel (1963); Branson (1976); Dornbusch (1976); Kawai (1985) and Marston (1985)]. The second type of model, derives the important macroeconomic relationships from the microfoundations of individual optimising behaviour [Dixit (1978); Neary (1980); Obstfeld (1981); Persson (1982); Kimbrough (1985); Frenkel and Razin (1986); Cuddington and Vinals (1985, 1986a) and Moore (1989)]. However, both of these approaches have yielded divergent results.

scholarly journals Twin Deficits and Feldstein-Horioka Puzzle in the Case Iran

2012 ◽  
Vol 3 (5) ◽  
pp. 167-171 ◽  
Author(s):  
Farzane Bagheri ◽  
Fatemeh Daroghe Hazrati .
Keyword(s):  
Current Account ◽  
Capital Mobility ◽  
Budget Deficit ◽  
Current Account Deficit ◽  
International Capital ◽  
Twin Deficits ◽  
International Capital Mobility ◽  
Long Run ◽  
Causality Relationship ◽  
The Relationship

The main purpose of this study is to examine the relationship between budget deficit and current account deficit in Iran's economy through twin deficits and Feldstein-Horioka puzzle. To achieve this goal, Engel-Granger and seemingly unrelated regressions are used during "1971-2007". The results indicate that there exists a long run equilibrium link between budget deficit and current account deficit. There is a one–way causality relationship from the budget deficit toward the current account deficit .Testing the validity of the Feldstein-Horioka puzzle indicates a low level of international capital mobility for Iran.

scholarly journals Testing for Twin Deficits and Ricardian Equivalence Hypotheses: Evidence from Iran

2012 ◽  
Vol 3 (3) ◽  
pp. 77-84 ◽  
Author(s):  
Farzane Bagheri ◽  
Salma Keshtkaran .
Keyword(s):  
Current Account ◽  
Budget Deficit ◽  
Current Account Deficit ◽  
Ricardian Equivalence ◽  
Twin Deficits ◽  
Long Run ◽  
Causality Tests ◽  
Causality Relationship ◽  
The Relationship ◽  
Casual Relationship

The main purpose of this study is to examine the relationship between budget deficit and current account deficit in Iran from 1971 to 2007. Twin deficits, which argues that a larger budget deficit leads to an expanded current account deficit, and Ricardian equivalence hypothesis, which states that there is no casual relationship between these two deficits, are examined for this purpose. To achieve this goal, Johansen co-integration and Granger causality tests are used for the period under study. The results indicate that there exists a long run equilibrium link between budget deficit and current account deficit. There is a one-way causality relationship from the budget deficit toward the current account deficit.

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