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Structural breaks and twin deficits hypothesis in African countries
journal contribution
posted on 2015-02-27, 14:36 authored by Ahmad Hassan AhmadAhmad Hassan Ahmad, Olalekan B. AworindeThe study examines the twin deficits hypothesis in a sample of twelve
African countries for the period between 1980 and 2009. These countries have
experienced both the current account and the fiscal deficits, among others, that
prompted an introduction of structural reforms. The paper explores long-run relationship
between the series and their short-run dynamics within the context of
endogenously determined structural breaks. The identified dates are generally
associated with external factors that include commodity price boom and burst cycles
that the countries heavily depend on. The estimated results for eight of the countries
indicate that there is a positive relationship between the current account and fiscal
deficits and therefore, support the twin deficits hypothesis. Results for the remaining
four countries of Ethiopia, Kenya, South Africa and Uganda, on the other hand,
show that the relationship between the two is negative.
History
School
- Business and Economics
Department
- Business
Published in
Economic Change and RestructuringVolume
48Issue
1Pages
1 - 35 (35)Citation
AHMAD, A.H. and AWORINDE, O.B., 2015. Structural breaks and twin deficits hypothesis in African countries. Economic Change and Restructuring, 48 (1), pp.1-35.Publisher
© Springer Science+Business Media New YorkVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Publication date
2015Notes
The final publication is available at Springer via http://dx.doi.org/10.1007/s10644-014-9154-2ISSN
1573-9414eISSN
1574-0277Publisher version
Language
- en