Testing Twin Deficits Hypothesis using VARs and Variance Decomposition

• Main Authors: Evan, Lau, Ahmad Zubaidi, Baharumshah, Ahmed M, Khalid
• Format: E-Article
• Language: English
• Published: Taylor & Francis Group 2006
• Subjects: HB Economic Theory; HG Finance
• Online Access: http://ir.unimas.my/id/eprint/7144/1/Testing%20Twin%20Deficits%20Hypothesis.pdf; http://ir.unimas.my/id/eprint/7144/; http://www.tandfonline.com/doi/pdf/10.1080/13547860600764245
• Institution: Universiti Malaysia Sarawak

This paper examines the twin deficits hypothesis in the ASEAN countries. The major findings of this paper are the following. (1) Long run relationships are detected between budget and current account deficits. (2) The Keynesian view fits well for Thailand since the causality runs from budget deficit...