IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v26y1998i2p121-128.html
   My bibliography  Save this article

Brazil's twin deficits: An empirical examination

Author

Listed:
  • M. Faizul Islam

Abstract

This paper examines empirically the causal relationship between budget deficits and trade deficits for Brazil from 1973:1Q through 1991:4Q. This relationship is investigated in the context of Granger's test of causality. The final prediction error criterion, as outlined by Hsiao [1981], is applied in determining the appropriate lag length of the two variables. Empirical results suggested the presence of bilateral causality between trade deficits and budget deficits. Copyright International Atlantic Economic Society 1998

Suggested Citation

  • M. Faizul Islam, 1998. "Brazil's twin deficits: An empirical examination," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(2), pages 121-128, June.
  • Handle: RePEc:kap:atlecj:v:26:y:1998:i:2:p:121-128
    DOI: 10.1007/BF02299354
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02299354
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Feldstein, Martin, 1982. "Government deficits and aggregate demand," Journal of Monetary Economics, Elsevier, vol. 9(1), pages 1-20.
    2. Cebula, Richard J, 1991. "Federal Government Budget Deficits and Interest Rates: Reply," Public Finance = Finances publiques, , vol. 46(2), pages 331-334.
    3. Bharat R. Koluri & Demetrios S. Giannaros, 1987. "Deficit and External Debt Effects on Money and Inflation in Brazil and Mexico: Some Evidence," Eastern Economic Journal, Eastern Economic Association, vol. 13(3), pages 243-248, Jul-Sep.
    4. Evans, Paul, 1986. "Is the dollar high because of large budget deficits?," Journal of Monetary Economics, Elsevier, vol. 18(3), pages 227-249, November.
    5. Akaike, Hirotugu, 1981. "Likelihood of a model and information criteria," Journal of Econometrics, Elsevier, vol. 16(1), pages 3-14, May.
    6. Cardoso, Eliana A., 1991. "Deficit finance and monetary dynamics in Brazil and Mexico," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 173-197, November.
    7. Bahmani-Oskooee, Mohsen & Payesteh, Sayeed, 1993. "Budget deficits and the value of the dollar: An application of cointegration and error-correction modeling," Journal of Macroeconomics, Elsevier, vol. 15(4), pages 661-677.
    8. Plosser, Charles I., 1982. "Government financing decisions and asset returns," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 325-352.
    9. Hsiao, Cheng, 1981. "Autoregressive modelling and money-income causality detection," Journal of Monetary Economics, Elsevier, vol. 7(1), pages 85-106.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Algieri, Bernardina, 2013. "An empirical analysis of the nexus between external balance and government budget balance: The case of the GIIPS countries," Economic Systems, Elsevier, vol. 37(2), pages 233-253.
    2. Ziesemer, Thomas, 2005. "How to cure the trade balance? Reducing budget deficits versus devaluations in the presence of J- and W-curves for Brazil," Research Memorandum 018, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    3. repec:eur:ejserj:124 is not listed on IDEAS
    4. Abdulnasser Hatemi-J & Ghazi Shukur, 2002. "Multivariate-based causality tests of twin deficits in the US," Journal of Applied Statistics, Taylor & Francis Journals, vol. 29(6), pages 817-824.
    5. E Lau & S Abu Mansor & C-H Puah, 2010. "Revival of the Twin Deficits in Asian Crisis-affected Countries," Economic Issues Journal Articles, Economic Issues, vol. 15(1), pages 29-54, March.
    6. Beker, Victor, 2014. "On the European debt crisis," MPRA Paper 59869, University Library of Munich, Germany.
    7. Bernardin Senadza & Godson Korbla Aloryito, 2016. "The twin deficits hypothesis: Evidence from Ghana," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 9(3), pages 55-62, December.
    8. 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.
    9. Armanda Keqi, 2014. "Higher Education and Graduate Employment in Albania," EJSER European Journal of Social Sciences Education and Research Articles, European Center for Science Education and Research, vol. 1, May-Augus.
    10. Evan Lau & Tuck Cheong Tang, 2009. "Twin deficits in Cambodia: Are there Reasons for Concern? An Empirical Study," Monash Economics Working Papers 11-09, Monash University, Department of Economics.
    11. Evan Lau & Tuck Cheong Tang, 2009. "Twin deficits in Cambodia: An Empirical Study," Economics Bulletin, AccessEcon, vol. 29(4), pages 2783-2794.
    12. Asrafuzzaman & Amit Roy & Sanat Das Gupta, 2013. "An Empirical Investigation of Budget and Trade Deficits: The Case of Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 570-579.
    13. Aristovnik, Aleksander & Djurić, Sandra, 2010. "Twin deficits and the Feldstein-Horioka puzzle: a comparison of the EU member states and candidate countries," MPRA Paper 24149, University Library of Munich, Germany.
    14. Mossadak Anas, PhD researcher, 2013. "Twin deficits in Morocco: An empirical investigation," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(7), pages 160-172, July.
    15. Kalou, Sofia & Paleologou, Suzanna-Maria, 2012. "The twin deficits hypothesis: Revisiting an EMU country," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 230-241.
    16. Aleksander Aristovnik, 2005. "Twin Deficits Hypothesis And Horioka-Feldstein Puzzle In Transition Economies," International Finance 0510020, EconWPA.
    17. Brahim Mansouri, 2001. "Fiscal Deficits, Public Absorption and External Imbalances: An Empirical Examination of the Moroccan Case," Working Papers 0138, Economic Research Forum, revised 12 2001.
    18. Constantine, Collin, 2014. "Rethinking the Twin Deficits," MPRA Paper 58798, University Library of Munich, Germany.
    19. Puah, Chin-Hong & Lau, Evan & Tan, Kim Lee, 2006. "Budget-current account deficits nexus in Malaysia," MPRA Paper 37677, University Library of Munich, Germany.
    20. Chowdhury, Khorshed & Saleh, Ali Salman, 2007. "Testing the Keynesian Proposition of Twin Deficits in the Presence of Trade Liberalisation: Evidence from Sri Lanka after War: the case of a bridge too far?," Economics Working Papers wp07-09, School of Economics, University of Wollongong, NSW, Australia.
    21. Ahmad Zubaidi Baharumshah & Evan Lau, 2005. "Budget and Current Account Deficits in SEACEN Countries: Evidence Based on the Panel Approach," International Finance 0504002, EconWPA.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:26:y:1998:i:2:p:121-128. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.