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Title: | The dynamic linkages of fiscal and current account deficits: New evidence from five highly indebted European countries accounting for regime shifts and asymmetries |
Authors: | Trachanas, Emmanouil Katrakilidis, Constantinos |
Type: | Article |
Subjects: | FRASCATI::Social sciences::Economics and Business::Economics |
Keywords: | Fiscal deficit Current account deficit Twin deficits Structural breaks Asymmetric cointegration |
Issue Date: | 2013 |
Source: | Economic Modelling |
Volume: | 31 |
First Page: | 502 |
Last Page: | 510 |
Abstract: | This article provides new empirical evidence on the long-term relationship between the fiscal and current account imbalances, of five European economies under financial market pressure and insolvency; Portugal, Ireland, Italy, Greece and Spain. We attempt to re-evaluate the dynamic linkages between the twin-deficits allowing for the presence of structural breaks and asymmetries. The evidence is in favor of the “twin deficits hypothesis”. More insight is further provided through the magnitude and significance of the asymmetric linkages between the twin deficits in the long-run time horizon. Our findings indicate that fiscal deficit decreases have a greater impact on the current account deficit rather than the opposite. |
URI: | https://doi.org/10.1016/j.econmod.2012.12.026 https://ruomo.lib.uom.gr/handle/7000/1481 |
ISSN: | 0264-9993 |
Other Identifiers: | 10.1016/j.econmod.2012.12.026 |
Appears in Collections: | Department of Accounting & Finance |
Files in This Item:
File | Description | Size | Format | |
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Trachanas & Katrakilidis [2013] EM.pdf | 343,38 kB | Adobe PDF | View/Open |
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