Twin deficits in Morocco: An empirical investigation

Authors

  • Mossadak Anas, PhD researcher

DOI:

https://doi.org/10.18533/ijbsr.v3i7.257

Keywords:

Fiscal Policy, Budget Deficit, Current Account, Twin deficits, VAR, Impulse responses

Abstract

This paper investigates the hypothesis of twin deficits in Morocco. According to this theoretical concept, the budget deficit is the main cause of the current account deficit. The Empirical results obtained from the impulse responses analysis of the VAR model and the Granger-causality test indicate the existence of an unidirectional causality going from the current account deficit to the fiscal deficit. This implies the existence of reverse causality i.e. the current account deterioration is the main cause of the fiscal deficit in Morocco

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Issue

Vol. 3 No. 7 (2013): July

Section

Article

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