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Title: Structural breaks and twin deficits hypothesis in African countries
Authors: Ahmad, A.H.
Aworinde, Olalekan B.
Keywords: Fiscal deficits
Current account deficits
Structural breaks
African countries
Issue Date: 2015
Publisher: © Springer Science+Business Media New York
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.
Abstract: The 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.
Description: The final publication is available at Springer via http://dx.doi.org/10.1007/s10644-014-9154-2
Version: Accepted for publication
DOI: 10.1007/s10644-014-9154-2
URI: https://dspace.lboro.ac.uk/2134/16843
Publisher Link: http://dx.doi.org/10.1007/s10644-014-9154-2
ISSN: 1573-9414
Appears in Collections:Published Articles (Business)

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