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The Impact of Fiscal Policy on the Current Account Balance in the Case of Bosnia and Herzegovina

Author

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  • Amir Karalic

    (The Higher Education Institution FINra Tuzla, Bosnia and Herzegovina)

Abstract

This paper aims to investigate and determine the relationship between the budget, changes in GDP, price indices, and movement of the real exchange rate on one hand, and the state of the mud balance in Bosnia and Herzegovina during the period of 2005-2019. The paper covers literature related to this field, empirical knowledge, case studies of various international types of research, and certain econometric methods. The research results indicate the presence of a negative correlation between the budget deficit, reduction in prices and the real exchange rate, and improvement of the current balance. The outcomes vary depending on whether it is in the short-term or long-term horizon.

Suggested Citation

  • Amir Karalic, 2023. "The Impact of Fiscal Policy on the Current Account Balance in the Case of Bosnia and Herzegovina," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 9(1), pages 32-46, April.
    • Handle: RePEc:mgs:ijoied:v:9:y:2023:i:1:p:32-46
    DOI: 10.18775/ijied.1849-7551-7020.2015.91.2003
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    References listed on IDEAS

    as
    1. Kumhof, Michael & Laxton, Douglas, 2013. "Fiscal deficits and current account deficits," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 2062-2082.
    2. Enders, Walter & Lee, Bong-Soo, 1990. "Current Account and Budget Deficits: Twins or Distant Cousins?," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 373-381, August.
    3. Abell, John D., 1990. "Twin deficits during the 1980s: An empirical investigation," Journal of Macroeconomics, Elsevier, vol. 12(1), pages 81-96.
    4. Anoruo, Emmanuel & Ramchander, Sanjay, 1998. "Current account and fiscal deficits: Evidence from five developing economies of Asia," Journal of Asian Economics, Elsevier, vol. 9(3), pages 487-501.
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    More about this item

    Keywords

    Budget; Current account; Price index; Real exchange rate;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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