IDEAS home Printed from https://ideas.repec.org/a/taf/rmdjxx/v9y2017i2p198-232.html
   My bibliography  Save this article

The nexus between internal and external macroeconomic imbalances: evidence from Egypt

Author

Listed:
  • Omneia Helmy
  • Chahir Zaki

Abstract

This paper examines the nexus between internal and external imbalances of the Egyptian economy. In fact, both the twin-deficit hypothesis (TDH) and the Feldstein–Horioka (FH) paradox are examined. Using quarterly data (between 2002 and 2014) in order to capture the short-term dynamics that might affect the Egyptian economy, a Granger causality test and an error-correction model are run in order to determine both the short-term adjustment and the long-run relationship between internal and external imbalances. Our main findings show that the TDH is rejected and a reversed causality running from the current account to the budget deficit exits. Moreover, the FH puzzle is partially rejected since Egypt, while not being perfectly integrated in the world capital market, has a high degree of capital mobility.

Suggested Citation

  • Omneia Helmy & Chahir Zaki, 2017. "The nexus between internal and external macroeconomic imbalances: evidence from Egypt," Middle East Development Journal, Taylor & Francis Journals, vol. 9(2), pages 198-232, July.
    • Handle: RePEc:taf:rmdjxx:v:9:y:2017:i:2:p:198-232
    DOI: 10.1080/17938120.2017.1368217
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/17938120.2017.1368217
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17938120.2017.1368217?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. Sarah El-Khishin & Jailan El-Saeed, 2021. "The Twin Deficit Hypothesis in the MENA Region: Do Geopolitics Matter?," Economies, MDPI, vol. 9(3), pages 1-17, September.
    2. Dissou, Yazid & Nafie, Yousra, 2021. "On the link between current account and fiscal imbalances in the presence of structural breaks: Empirical evidence from Egypt," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 15-27.
    3. Thibault Lemaire, 2020. "Phillips in A Revolution: Unemployment and Prices in Early 21st Century Egypt," Working Papers hal-03948605, HAL.
    4. Amira Akl Ahmed, 2018. "Bank-Based Financial Development and Economic Growth: Time-Varying Causality Analysis for Egypt," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(4), pages 123-135, April.

    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:9:y:2017:i:2:p:198-232. 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.