Shruti Shastri, A.K. Giri, Geetilaxmi Mohapatra

69124

Assessing the Triple Deficit Hypothesis for Major South Asian Countries: A Panel Data Analysis

Assessing the Triple Deficit Hypothesis for Major South Asian Countries: A Panel Data Analysis

The paper examines the “triple deficit hypothesis” - An extension of the “twin deficit hypothesis” with inclusion of private saving gap for a panel of five South Asian countries, namely India, Pakistan, Bangladesh, Srilanka and Nepal for the period 1985-2015. The results based on first and second generation panel cointegration tests indicate long-run relationship among budget balance (BB), current account balance (CAB) and private saving gap. The long-run coefficients obtained using mean group (MG)-dynamic ordinary least square, MG-fully modified ordinary least squares and common correlated effect MG indicate positive impact of BB and private saving gap on CAB thus confirming triple deficit hypothesis. The causality analysis reveals feedback relationship between CAB and BB implying that improvement in CAB requires fiscal austerity but fiscal adjustment is not fully policy controlled and requires adjustment in current account. Further, the causation also runs from saving gap to CAB and BB implying that plugging the saving gap would help improve both current account and BB.
Keywords:

Triple Deficit Hypothesis, South Asia, Panel Cointegration, Panel Causality GM-DOLS, GM- FMOLS, CCEMG Estimator,

PDF
International Journal of Economics and Financial Issues-Cover
  • Başlangıç: 2011
  • Yayıncı: İlhan ÖZTÜRK
Arşiv
Sayıdaki Diğer Makaleler

Dynamics of Service Trade in Association of Southeast Asian Nations: Process Towards Integration

Arkan Fadhil, Fithra Faisal Hastiadi

Time Taken to Reach the Performance Summit: Nature of Relation between Working Capital Management and Firm Performance in the Indian Context

Nitya Nand TRİPATHİ, Naseem AHAMED

Political, Social and Economic Determinants of Corruption

Nafi Ghaniy, Fithra Faisal Hastiadi

Determinants of Financial Performance of State-Owned Enterprises with Government Subsidy as Moderator

Aminullah Assagaf, Hapzi Ali

Assessing the Effectiveness of the Monetary Policy Instrument during the Inflation Targeting Period in South Africa

Lumengo Bonga-Bonga

Mapping of Featured Micro-small-medium Enterprises in Buleleng Regency, Bali, Indonesia

Made ANTARA, Made Sri SUMARNİASİH

Stakeholders’ Perceptions and Predictions of Stock Exchange Demutualization: The Case of Kuwait Stock Exchange

Talla M ALDEEHANİ, Amani Kh. BOURESLİ

Illiquidity, Investor Sentiment and Stock Returns: Evidence from Malaysia

Chandana GUNATHİLAKA, Mohamad JAİS, Sophee Sulong BALİA

Intellectual Capital and Corporate Governance in Financial Performance Indonesia Islamic Banking

Sugeng SUROSO, Tri WİDYASTUTİ, M. Noor SALİM, İrma SETYAWATİ

The Role of Corruption Control in Moderating the Relationship Between Value Added Tax and Income Inequality

Mohd Zulkhairi MUSTAPHA, Eric H. Y. KOH, Sok-gee CHAN, Zulkufly RAMLY