Structural breaks and twin deficits hypothesis in African countries

Ahmad, Ahmad Hassan; Aworinde, Olalekan Bashir

doi:10.1007/s10644-014-9154-2

Cited by 10 publications

(13 citation statements)

References 24 publications

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“…The government budget deficit has a significant impact on the trade balance deficit, according to the theory and various previous studies (Ahmad & Aworinde, 2015;Epaphra, 2017;Sakyi et al, 2016;Senadza & Aloryito, 2016). The budget deficit is tough to avoid considering the government always implements a comprehensive fiscal policy so that it brings the consequences of new public debt withdrawals.…”

Section: The Phenomenon Of Twin Deficit and Its Impact On Gross Domesmentioning

confidence: 78%

“…This study uses quarterly secondary data (time series) from the period 2004: Q1 -2018: Q3 with a case study of Indonesia. The variables used include: (1) government budget (budget balance, BB) which is the ratio of the difference in the realization of state revenue reduced by state expenditure to GDP (being a proxy of the budget deficit); (2) current account balance (CA), which is the difference between the balance of the trade balance and the service balance displayed through the ratio to GDP; (3) gross domestic product (GDP) displayed in million rupiah (Ahmad & Aworinde, 2015;El-baz, 2014;Epaphra, 2017;Sakyi, Evans, & Opoku, 2016). (4) interest rates displayed in percentage terms (Ahmad & Aworinde, 2015;Epaphra, 2017;Kuncahyo, 2016;Sakyi et al, 2016).…”

Section: Methodsmentioning

confidence: 99%

“…Research in Botswana, Cameroon, Egypt, Ghana, Morocco, Nigeria, Tanzania, and Tunisia has a positive relationship between the budget deficit (BD) and the current account deficit (CAD). Different results found in Ethiopia, Kenya, South Africa, and Uganda there is a negative relationship between the budget deficit (BD) and the current account deficit (CAD) (Ahmad & Aworinde, 2015). Therefore, the study of the double deficit phenomenon is still quite exciting and needs to be done, especially in Indonesia.…”

Section: Introductionmentioning

confidence: 97%

“…Studies conducted by Ahmad & Aworinde (2015) in several African countries show conflicting results. Research in Botswana, Cameroon, Egypt, Ghana, Morocco, Nigeria, Tanzania, and Tunisia has a positive relationship between the budget deficit (BD) and the current account deficit (CAD).…”

Section: Introductionmentioning

confidence: 98%

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Twin Deficit Phenomena in the Two Government Eras in Indonesia

Wibowo

2020

bisnisekonomi

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The aim of this study is to analyze the development of the budget deficit and current account deficit in Indonesia in the era of President SBY and President Jokowi and to compare between the two eras. This study also analyzes the relationship of twin deficits to the Gross Domestic Product (GDP) and the interest rate (r). The analytical tool used was independent t-test (for comparison) and Vector Auto-Regressive (VAR). The data used comes from the International Monetary Fund (IMF), 2004:Q1-2018: Q3. The result showed that the budget deficit was the same in the two eras of government, but the trade balance deficit in the era of President Jokowi was far higher than before. The budget deficit has a significant effect on the trade balance deficit but does not apply otherwise (no causality). Variable gross domestic product and interest rates significantly influence both types of deficits.

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Section: The Phenomenon Of Twin Deficit and Its Impact On Gross Domesmentioning

confidence: 78%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 97%

Section: Introductionmentioning

confidence: 98%

See 2 more Smart Citations

Twin Deficit Phenomena in the Two Government Eras in Indonesia

Wibowo

2020

bisnisekonomi

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“…Additionally, the responsiveness of the dependent variable due to the structural breaks can be ascertained. This can be information for policy makers (Stauvermann et al, 2016;Ahmad andAworinde, 2015 andDas et al, 2014). 1995; 2007 Source: estimated in Eviews 9, critical value from Bai-Perron (1998;, *** -significant at 5 %…”

Section: Structural Breaksmentioning

confidence: 99%

Exploring the Effect of Energy Consumption on the Economic Growth of Albania

Kumar

Stauvermann

Kumar

2019

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Albania is one of the most energy-resource abundant country, however faced with high domestic electricity demand. Moreover, the country is the largest crude oil producer in Europe. In this study, we investigate the following questions: (i) Is there a long-run association between energy consumption and output in Albania? (ii) What is the magnitude of energy effect in the short- and long-run on output in Albania? (iii) Which of the four hypotheses on the energy-growth nexus describes most appropriately the energy-growth nexus in the case of Albania? (iv) How do the results compare with those of earlier studies? Thus, the study examines the effect of energy consumption on the economic growth of Albania over the periods 1980 to 2014 using a Cobb-Douglas production function whilst controlling for multiple structural breaks. The short-run and long-run estimations are carried out using the autoregressive distributed lag (ARDL) bounds procedure. Causality is examined using the vector error correction method. Also, we conduct consistency and robustness checks using other regression methods. The results from the ARDL procedure indicate that the elasticity of income with respect to energy is 0.36. This implies that ceteris paribus, a 1% increase in energy consumption will increase output by 0.36%. The causality result supports the conservation hypothesis which implies that economic growth drives energy consumption, which is consistent with some of the earlier studies.

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