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Journals / Yönetim ve Ekonomi Araştırmaları Dergisi / 2018 / Cilt: 16 - Sayı: 3

THE TWIN DEFICITS HYPOTHESIS: NEW EVIDENCE FROM GIIPS ACCOUNTING FOR STRUCTURAL SHIFTS IN CAUSAL LINKAGES

İKİZ AÇIK HİPOTEZİ: YAPISAL KIRILMALARIN DİKKATE ALINDIĞI NEDENSELLİK ANALİZİ İLE GIIPS ÜLKELERİ İÇİN YENİ KANITLAR

Dilek DURUSU ÇİFTÇİ
Pages
51–69
Publication Date
2018-09-30
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

On the other hand, the causality analysis that account for structural changes show that current account targeting hypothesis is supported by all countries, except Ireland

📌 3 Key Takeaways

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Objective & Hypothesis:This study re-examines the dynamic causal link between government budget and current account deficits for five highly indebted European countries: Greece, Ireland, Italy, Portugal and Spain (GIIPS) with newly developed econometric techniques.
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Key Findings & Data:Utilizing first Toda –Yamamoto causality analysis and then its Fourier approximation to consider structural shifts, this study asks whether accounting structural shifts plays a role on these causal linkages.
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Conclusion & Impact:On the other hand, the causality analysis that account for structural changes show that current account targeting hypothesis is supported by all countries, except Ireland
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Bütçe açığı · Cari açık · İkiz açıklar

Abstract

This study re-examines the dynamic causal link between government budget and current account deficits for five highly indebted European countries: Greece, Ireland, Italy, Portugal and Spain (GIIPS) with newly developed econometric techniques. Utilizing first Toda –Yamamoto causality analysis and then its Fourier approximation to consider structural shifts, this study asks whether accounting structural shifts plays a role on these causal linkages. The results reveal that considering structural shifts is important for the relationship between fiscal and current account imbalances of the GIIPS. The findings of analysis that does not consider structural changes indicate that the twin deficit hypothesis is supported through Keynesian Hypothesis (for Spain) or Current Account Targeting Hypothesis (for Greece and Portugal) but also Barro-Ricardo Equivalence Theorem is acknowledged for Ireland and Italy. On the other hand, the causality analysis that account for structural changes show that current account targeting hypothesis is supported by all countries, except Ireland

Özet

Bu çalışmada, oldukça yüksek borç yüküne sahip beş Avrupa ülkesi: Yunanistan, İrlanda, İtalya, Portekiz ve İspanya (GIIPS) için bütçe açığı ve cari açık arasındaki dinamik nedensellik ilişkileri yeni ekonometrik teknikler kullanılarak yeniden analiz edilmektedir. Öncelikle Toda-Yamamoto nedensellik testi ve sonrasında bu yöntemin yapısal kırılmaları dikkate alan yaklaşım tekniği kullanılarak yapısal kırılmaların dikkate alınmasının nedensellik bağlarında bir rolü olup olmadığı incelenmektedir. Sonuçlar, yapısal kırılmaların dikkate alınmasının, GIIPS ülkelerinin mali ve cari dengesizlikleri arasındaki ilişki açısından önemli olduğunu ortaya koymaktadır. Yapısal kırılmaları ihmal eden nedensellik analizi bulguları, İspanya için Keynesyen Hipotezi’nin, Yunanistan ve Portekiz için Cari Denge Hedefleme Hipotezi’nin ve son olarak İrlanda ve İtalya için Barro-Ricardo Hipotezini’nin geçerli olduğunu göstermektedir. Diğer taraftan yapısal kırılmaları dikkate alan nedensellik analizi sonuçları ise Cari Denge Hedefleme Hipotezi’nin İrlanda dışındaki tüm GIIPS ülkeleri için desteklendiğini göstermektedir

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Cite This Article

ÇİFTÇİ, D. D. (2018). THE TWIN DEFICITS HYPOTHESIS: NEW EVIDENCE FROM GIIPS ACCOUNTING FOR STRUCTURAL SHIFTS IN CAUSAL LINKAGES. Yönetim ve Ekonomi Araştırmaları Dergisi, Cilt: 16 - Sayı: 3, 51–69. https://ajindex.com/articles/26581

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