Using time series techniques, this study explores the relationship between trade deficits and budget deficits in Italy in the period 1970-2010. Empirical findings show that current account balance and government budget are I(1) processes. Cointegration tests reject the presence of a long-run relationship between these variables. Finally, Granger-causality tests show a unidirectional flow from trade deficits to budget deficits, in line with Neo-classical view.
MAGAZZINO C (2012). The Twin Deficits phenomenon: evidence from Italy. JOURNAL OF ECONOMIC COOPERATION AND DEVELOPMENT, 33(3), 65-80.
Titolo: | The Twin Deficits phenomenon: evidence from Italy |
Autori: | |
Data di pubblicazione: | 2012 |
Rivista: | |
Citazione: | MAGAZZINO C (2012). The Twin Deficits phenomenon: evidence from Italy. JOURNAL OF ECONOMIC COOPERATION AND DEVELOPMENT, 33(3), 65-80. |
Abstract: | Using time series techniques, this study explores the relationship between trade deficits and budget deficits in Italy in the period 1970-2010. Empirical findings show that current account balance and government budget are I(1) processes. Cointegration tests reject the presence of a long-run relationship between these variables. Finally, Granger-causality tests show a unidirectional flow from trade deficits to budget deficits, in line with Neo-classical view. |
Handle: | http://hdl.handle.net/11590/138267 |
Appare nelle tipologie: | 1.1 Articolo in rivista |
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