Twin Deficits in Africa_2_Manuscript_11.2019.pdf (162.71 kB)
Download fileRevisiting the twin deficits hypothesis: new evidence from nonlinear tests
journal contribution
posted on 2019-12-13, 09:41 authored by Ahmad Hassan AhmadAhmad Hassan Ahmad, Olalekan B AworindeThis article investigates linear and nonlinear causal linkages between fiscal deficits and current account deficits in a sample of 12 African countries using quarterly data for the period 1980:1–2018:4. The results indicate evidence of unidirectional causality from current account deficits to the fiscal deficits in four countries while a unidirectional causality from fiscal deficit to current account deficit is found in five countries. Results from panel causality test revealed evidence of bidirectional causality between the two deficits. These conclusions suggest that policy to tackle one of the deficits should also take the other into consideration.
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