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Causality tests of the relationship between the twin deficits

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Author Info
Eugene Kouassi ()
Mbodja Mougoué ()
Kern O. Kymn ()
Abstract

We re-examine the causality between the twin deficits by testing for Granger non-causality between BD and CAD based on extended causality tests initially developed by Toda and Yamamoto (1995). Using international data from a sample of twenty developed and developing countries, we find evidence of causality (unidirectional or bi-directional) between the twin deficits for some developing countries. However, the results for developed countries are less persuasive. The empirical findings of this study are robust to alternative and independent causality testing procedures. Copyright Springer-Verlag 2004

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File URL: http://hdl.handle.net/10.1007/s00181-003-0181-5
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Publisher Info
Article provided by Springer in its journal Empirical Economics.

Volume (Year): 29 (2004)
Issue (Month): 3 (09)
Pages: 503-525
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Handle: RePEc:spr:empeco:v:29:y:2004:i:3:p:503-525

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Related research
Keywords: Granger non-causality; likelihood ratio; wald; and Lagrange multiplier tests; alternative tests; twin deficits; international evidence; C20; C22;

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  1. Carlos Marinheiro, 2006. "Egypt has presented important budget imbalances," GEMF Working Papers 2006-07, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
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