Twin deficits in small open Baltic economies

Link to:
Collection:
Mokslo publikacijos / Scientific publications
Document Type:
Straipsnis / Article
Language:
Anglų kalba / English
Title:
Twin deficits in small open Baltic economies
Authors:
In the Journal:
Panoeconomicus. 2014, 61, 2, p. 227-239
Notes:
Reikšminiai žodžiai: Baltijos šalys (Baltic states); Biudžeto balansas; Biudžeto deficitas; Biudžeto likutis; Dvigubas deficitas; Einamoji sąskaita; Vektorinių klaidų taisymo modelis; Vektorių klaidų taisymo modelis; Baltic countries; Budget balance; Current account; Twin deficit; Vector error correction model.
Keywords:
LT
Apskaita / Accounting; Dvigubas deficitas; Valstybės finansai. Biudžetas / Public finance. Budget; Vektorinių klaidų taisymo modelis; Vektorių klaidų taisymo modelis.
EN
Budget balance; Current account; Twin deficit; Vector error correction model.
Summary / Abstract:

ENThis paper analyzes the twin deficit hypothesis - simultaneous current account deficit and budget deficit - in three small open Baltic countries (Estonia, Latvia and Lithuania) running under certain forms of the fixed exchange rate regime. The idea of twin deficits is tested using the vector error correction model (VECM), Granger causality tests and forecast variance decomposition, involving three variables: current account, budget balance, and investments. The new estimates confirm significant long-run positive relation between budget balance and current account in Estonia and Lithuania on one hand and the negative one in case of budget balance and investments in all three considered countries. The results of the analysis are specific to each country as they depend on their particular macroeconomic background. The contribution was elaborated within the project VEGA 1/0973/11. [From the publication]

DOI:
10.2298/PAN1402227S
ISSN:
1452-595X
Subject:
Ekonomika / Economics
Permalink:
https://www.lituanistika.lt/content/73786
Updated:
2020-07-09 21:12:14
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