Twin deficits in CEEC economies: evidence from panel unit root tests
AbstractThis paper analyses the relation between the external and government deficits in a panel of CEEC economies. We first assess by panel unit root tests whether the fiscal and external intertemporal budget constraints hold, and then examine the role of public and private expenditure in the dynamics of external indebtedness by panel regression. The results show that government deficit is a significant but relatively minor source of external imbalances, and that the external indebtedness of CEEC economies is sustainable.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 2 ()
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current account; budget deficit; panel data; twin deficits; sustainability;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- H6 - Public Economics - - National Budget, Deficit, and Debt
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