Puah, Chin-Hong and Lau, Evan and Tan, Kim Lee (2006): Budget-current account deficits nexus in Malaysia. Published in: The Journal of Global Business Management , Vol. 2, No. 2 (2006): pp. 126-135.
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The purpose of this study is to contribute further on the twin deficits debate in a developing economy. The data for Malaysia over four decades is used as a case study. Empirical result obtained from the Johansen-Juselius (1990) cointegration test indicates that budget deficit and current account deficit do not contain common stochastic trend in the long run. However, the findings from the Granger non-causality test by Toda-Yamamoto (1995) support the Summer’s (1988) reverse causation proposition. This implies that a unidirectional causality running from current account to budgetary variable where the deterioration in current account deficit could worsen the budgetary position in the case of Malaysia.
|Item Type:||MPRA Paper|
|Original Title:||Budget-current account deficits nexus in Malaysia|
|Keywords:||Twin deficits; Fiscal policy; Toda-Yamamoto test|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C32 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
H - Public Economics > H6 - National Budget, Deficit, and Debt > H62 - Deficit; Surplus
|Depositing User:||Chin-Hong Puah|
|Date Deposited:||27. Mar 2012 12:54|
|Last Modified:||12. Feb 2013 21:22|
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