Fiscal and External Deficits Nexus in GIIPS Countries: Evidence from Parametric and Nonparametric Causality Tests
نویسندگان
چکیده
Abstract This paper investigates the relationship between fiscal and external deficits in five European Union countries (Greece, Ireland, Italy, Portugal, Spain) using quarterly data for period 1980:1–2020:1. Literature on these series used linear techniques, but generally reported inconclusive results. Nonlinearity has been overlooked even though policy is likely to exhibit nonlinearity due its sensitivity political decisions. To capture this behaviour, nonlinear causality techniques are applied here addition usual extant literature. The results show that there evidence of unidirectional from trade balances government Greece a balance Portugal. also indicate bi-directional Ireland Spain. implication governments need address manage their balances. Policies will improve countries’ revenue base, such as tax labour market reforms well capital engender productivity increase competitiveness, would be beneficial.
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ژورنال
عنوان ژورنال: International Advances in Economic Research
سال: 2021
ISSN: ['1573-966X', '1083-0898']
DOI: https://doi.org/10.1007/s11294-021-09829-0