IDEAS home Printed from https://ideas.repec.org/a/taf/rmdjxx/v12y2020i1p35-56.html
   My bibliography  Save this article

Causal relationship between current account and financial account: the case of Tunisia

Author

Listed:
  • Hager Farhoud
  • Lotfi Taleb

Abstract

The Tunisian economy during the last thirty years suffered from a chronic current account deficit. The present paper investigates the long and short-run dynamics between the surplus of the aggregated and disaggregated financial account and the persistent pattern of current account deficit in Tunisia over the period 1977–2009. Based on bounds testing cointegration approach using an autoregressive distributed lag (ARDL), we found evidence supportive of long-run cointegration relationships between the current account and the financial account for both aggregated and disaggregated levels. The results also highlight that there is evidence of unidirectional causality from portfolio investment to the current account over the long-run. These findings suggest that the current account should be used by the Tunisian government as a control variable for capital flows and could be considered as valuable information for the liberalization of the financial account in Tunisia.

Suggested Citation

  • Hager Farhoud & Lotfi Taleb, 2020. "Causal relationship between current account and financial account: the case of Tunisia," Middle East Development Journal, Taylor & Francis Journals, vol. 12(1), pages 35-56, January.
    • Handle: RePEc:taf:rmdjxx:v:12:y:2020:i:1:p:35-56
    DOI: 10.1080/17938120.2020.1719471
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/17938120.2020.1719471
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17938120.2020.1719471?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Citations

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


    Cited by:

    1. Mohamed Ali Chroufa & Nouri Chtourou, 2023. "Asymmetric relationship between exchange rate and inflation in Tunisia: fresh evidence from multiple-threshold NARDL model and Granger quantile causality," SN Business & Economics, Springer, vol. 3(7), pages 1-21, July.

    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:taf:rmdjxx:v:12:y:2020:i:1:p:35-56. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rmdj .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.