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Structural breaks and the twin deficits hypothesis: Evidence from East Asian countries

Author

Listed:
  • Ahmad Zubaidi Baharumshah

    () (Universiti Putra Malaysia)

  • Evan Lau

    () (Universiti Malaysia Sarawak (UNIMAS))

Abstract

In this paper, we examine the relevance of the twin deficits hypothesis (TDH) for selected East Asian countries. Empirical results reveal that the admission of regime shifts substantially influences the conclusion that TDH exists in four out of the seven countries that we have investigated. It seems that TDH are less likely to be evident in countries with highly developed financial systems (Singapore and Japan).

Suggested Citation

  • Ahmad Zubaidi Baharumshah & Evan Lau, 2009. "Structural breaks and the twin deficits hypothesis: Evidence from East Asian countries," Economics Bulletin, AccessEcon, vol. 29(4), pages 2517-2524.
  • Handle: RePEc:ebl:ecbull:eb-09-00562
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Matthias Hartmann & Helmut Herwartz, 2012. "Consolidation first - About twin deficits and the causal relation between fiscal budget and current account imbalances," Economics Bulletin, AccessEcon, vol. 32(4), pages 3313-3319.
    2. repec:kap:iaecre:v:19:y:2013:i:3:p:289-310 is not listed on IDEAS
    3. Cosimo Magazzino, 2012. "Fiscal Policy, Consumption and Current Account in the European Countries," Economics Bulletin, AccessEcon, vol. 32(2), pages 1330-1344.
    4. Tosun, M. Umur & Iyidogan, Pelin Varol & Telatar, Erdinç, 2014. "The Twin Deficits in Selected Central and Eastern European Economies: Bounds Testing Approach with Causality Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 141-160, June.
    5. repec:asi:aeafrj:2017:p:959-971 is not listed on IDEAS
    6. Francesco Forte & Cosimo Magazzino, 2013. "Twin Deficits in the European Countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 19(3), pages 289-310, August.

    More about this item

    Keywords

    Current account; Budget deficit; Twin deficits hypothesis; Regime shift; Asian countries;

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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