scholarly journals Analysing the Relationship between Budget Deficit and Current Account Deficit in Namibia

2020 ◽  
pp. 35-43
Author(s):  
Achiles Shifidi ◽  
Jacob M. Nyambe
Keyword(s):  
Causal Relationship ◽  
Current Account ◽  
Budget Deficit ◽  
Time Series Data ◽  
Current Account Deficit ◽  
Impulse Response Function ◽  
Transmission Mechanism ◽  
Series Data ◽  
Current Account Balance ◽  
The Government

Is there a causal relationship between budget deficit and current account deficit? This study attempts to explain the significance of the transmission mechanism, (the exchange rate and interest rate) in explaining the twin deficit hypothesis (i.e. budget deficit and current account deficit) in Namibia. The study employed analytical methods of unit roots, cointegration, Granger-causality, and the impulse response function for estimation. In contributing to this ongoing debate, the study used the case of Namibia over the period spanning from 1990-2014 using time series data. Budget deficit and current account deficit proved to be significant. There is a unidirectional causal relationship between budget deficit and current account deficit in Namibia which runs from current account deficit to budget deficit. However, the transmission mechanism proved to be less significant in explaining the twin deficit hypothesis in Namibia.  Having found a positive relationship between current account deficit and budget deficit in Namibia, the government should consider curbing the increasing current account balance as a way of reducing its adverse effect on the budget balance. From this study, it is indicated that stabilising the current account deficit problem could assist in managing the budget deficit problem in Namibia.

scholarly journals Twin Deficit Hypothesis: A Case of Pakistan

2018 ◽  
Vol 2 (1) ◽  
pp. 71 ◽  
Author(s):  
Farrah Yasmin
Keyword(s):  
Granger Causality ◽  
Current Account ◽  
Budget Deficit ◽  
Time Series Data ◽  
Current Account Deficit ◽  
Impulse Response Function ◽  
Unit Root Test ◽  
Series Data ◽  
Causality Test ◽  
Adf Test

The prime motive of this study is to scrutinize the twin deficit for annual time series data over the period 1990-2010 for Pakistan. Twin deficit hypothesis expressed that an expansion in budget deficit will ground for rise in current account deficit. To diagnose affiliation amongst couple of variables, applied Unit root test (ADF-test), Johansen cointegration technique, Impulse response function and Granger causality test. The Granger causality demonstrate that the causality direction travel from current account deficit to budget deficit. When current account deficit occurs it leads to budget deficit. So the finding proves that there is a positive connection among both variables. Investigations are most reliable for Pakistan economy. Finally, this study confirms the rapport amid current account deficit and budget deficit.

scholarly journals ANALISIS KAUSALITAS TRIPLE DEFICIT HYPOTHESIS DI INDONESIA

2018 ◽  
Vol 7 (1) ◽  
pp. 43
Author(s):  
Lara Putri Arantika ◽  
Yeniwati Yeniwati ◽  
Mike Triani
Keyword(s):  
Time Series ◽  
Causal Relationship ◽  
Current Account ◽  
Budget Deficit ◽  
Time Series Data ◽  
Vector Autoregression ◽  
Current Account Deficit ◽  
Secondary Data ◽  
Series Data ◽  
Relationship Of

This study aims to determine and analyze the causal relationship of triple deficit hypotheis between budget deficit, current account deficit, and saving-investment gap in Indonesia by using Vector Autoregression (VAR) method. The type of this research is descriptive reseacrh, where the data used secondary data in the form of time series data from the year 2003:Q1-2016:Q4. The finding of this study indicate that budget deficit and current account deficit have one-way relationship, budget deficit and saving-investment gaphave one-way relationship and current account deficit and saving-investment gap not have causality or one-way relationship.

scholarly journals The Effect of IJ-EPA to Indonesia Export: Interupted Time Series (ITS) Approach

2020 ◽  
Vol 2 (1) ◽  
pp. 128-145
Author(s):  
Yuafanda Kholfi Hartono ◽  
Sumarto Eka Putra
Keyword(s):  
Time Series ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Time Series Data ◽  
Current Account Deficit ◽  
Trade Agreement ◽  
Export Market ◽  
Series Data ◽  
The Government ◽  
The Impact

Indonesia Japan Economic Partnership Agreement (IJ-EPA) is a bilateral free-trade agreement between Indonesia and Japan that has been started from July 1st, 2008. After more than a decade of its implementation, there is a question that we need to be addressed: Does liberalization of IJ-EPA make Indonesia’s export to Japan increase? This question is important since the government gives a trade-off by giving lower tariff for certain commodities agreed in agreement to increase export. Using Interrupted time series (ITS) analysis based on time-series data from Statistics Indonesia (BPS), this article found that the impact of IJ-EPA decreased for Indonesia export to Japan. Furthermore, this paper proposed some potential commodities that can increase the effectiveness of this FTA. The importance of this topic is that Indonesia will maximize the benefit in implementing of agreement that they made from the third biggest destination export of their total export value, so it will be in line with the government's goal to expand export market to solve current account deficit. In addition, the method that used in this paper can be implemented to other countries so that they can maximize the effect of Free Trade Agreement, especially for their export.

Global Patents on 3D Printing: Revelations Based on Vector Autoregression Analysis for Three Decades

2016 ◽  
Vol 13 (06) ◽  
pp. 1750004 ◽  
Author(s):  
Rohit S. Kannattukunnel
Keyword(s):  
3D Printing ◽  
Impulse Response ◽  
Response Function ◽  
Time Series Data ◽  
Vector Autoregression ◽  
Impulse Response Function ◽  
Variance Decomposition ◽  
Series Data ◽  
Vec Model ◽  
The Government

Engineers and designers from automotive and aerospace sectors have been using 3D printing (3DP) for decades to build prototypes. However, 3DP became popular only recently. This paper is divided into three sections. Section 1 is introductory in nature, which deals with current trends, the modeling process of printing and deliberation on different categories of 3DP. Section 2 deals with the research methodology. An exquisite technique to study innovation dealing with time series data, called the vector autoregression (VAR), is performed to analyze the world patent data on 3DP, based on the information provided by the Government of UK and the International Monetary Fund (IMF). Section 3 attempts to forecast future trends on 3DP by using two techniques viz. impulse response function and variance decomposition. The VAR analysis performed revealed that GDP is not directly instrumental in the advancement in patenting of 3DP technology. Results captured by way of impulse response function suggest that when a shock is given to PR itself, it decreases sharply, whereas when a shock is given to investment, PR undergoes a steady decline. Thus, if there is any adverse shock imparted on investments, it directly reduces the patent ratio. Lastly, when an impulse is given to GDP, PR continuously increases, which implies that increase in GDP causes hike in investment which ultimately increases PR. The results of variance decomposition indicate that in the initial periods, PR itself explains the maximum variance, followed by the GDP and to the least by investment. The changes observed with the trend of explanatory character of variance imply that more investments in technology are instrumental in increasing patent ratio in the G7 countries as per the vector error correction (VEC) model developed here. Though during the nascent stage of emerging technologies investment in technology may not necessarily increase the patent ratio, the result obtained brings to light interesting insights.

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.

Re-Examining Public Debt and Current Account Dynamics in Ethiopia: SVAR Evidence

2020 ◽  
Author(s):  
Wondemhunegn Ezezew Melesse
Keyword(s):  
Current Account ◽  
Public Debt ◽  
Time Series Data ◽  
Emerging Market ◽  
Government Debt ◽  
Debt Management ◽  
Series Data ◽  
Current Account Balance ◽  
Current Account Dynamics ◽  
General Government

Abstract Public debt management is now an integral part of overall macroeconomic management in many developing and emerging market economies. Preventing unsustainable debt accumulation and maintaining healthy fiscal profile begins with understanding its key drivers both in the short- and in the long run. This study applies structural vector auto-regressive (SVAR) model on annual time series data to study general government debt and current account dynamics in Ethiopia for the period 1980–2018. Both the impulse response and forecast error variance decomposition results confirm that fiscal balance exerts the strongest influence on both government debt and current account balance in the short run. In addition, own shock as well as shocks stemming from gross fixed capital formation and growth have significant effects on general government debt. The findings were robust to alternative data transformation, differing Choleski ordering of the model variables, and inclusion of exogenous deterministic terms that capture changes in the political landscape.JEL classification: E60, E63, C32, H63

scholarly journals Twin Deficit and the Macroeconomic variables in Kenya

2014 ◽  
Vol 2 (9) ◽  
pp. 64-85
Author(s):  
Kennedy O Osoro ◽  
Seth O Gor ◽  
Mary L Mbithi
Keyword(s):  
Interest Rates ◽  
Current Account ◽  
Budget Deficit ◽  
Current Account Deficit ◽  
Empirical Relationship ◽  
Trade Deficit ◽  
Current Account Balance ◽  
Budget Deficits ◽  
Domestic Investment ◽  
Macroeconomic Variables

The purpose of this paper is to test the twin deficit hypothesis and empirical relationship between current account balance and budget deficit while including other important macroeconomic variables such as growth, interest rates, money supply (M3) in Kenya from 1963-2012. The study was based on co integration analysis and error correction model (ECM). The results reveal a long-run association between the trade deficit and the fiscal deficit. The findings indicate that the Keynesian view fits well for Kenya since the causality runs from budget deficit to current account deficit. We detected unidirectional causation between the twin deficits, running from budget deficit to current account directly and indirectly through budget deficits which raise real interest rates, crowd out domestic investment, and cause the currency to appreciate in relation to the other currencies and further deteriorates the current account deficit.

ANALISIS KAUSALITAS FAKTOR-FAKTOR PERTUMBUHAN EKONOMI DI INDONESIA

2019 ◽  
Vol 1 (4) ◽  
Author(s):  
Yondri Fadhli ◽  
Syamsul Amar B ◽  
Alpon Satrianto
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Money Supply ◽  
Time Series Data ◽  
Financial Institution ◽  
Secondary Data ◽  
Series Data ◽  
The Government ◽  
Causality Model ◽  
Auto Regression

The purpose of this study is to find out: How far is the Causality Relationship between the Amount of Money Supply, Investment, Savings and Economic Growth in Indonesia. This type of research is descriptive and associative. The type of data is secondary data. This study uses Time series data from 2005 Q1-2018 Q4 using the Vector Auto Regression (VAR) and Vector Estimation Causality Model (VECM) approaches. The results of this study show that: (1) there is a causal relationship between the money supply and economic growth. (2) There is no causal relationship between Investment and Economic Growth in Indonesia. (3) There is no causal relationship between Economic Growth Savings in Indonesia, but there is a one-way relationship namely Economic Growth affecting Savings. Based on the results of this study, the authors advise the Government to keep the national economy more stable and in a healthy financial institution. This will be able to facilitate the circulation of money in the community so that economic activity grows well.

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