The Effect of Government Budget on Current Account: Evidence from Ethiopia
| dc.contributor.advisor | Tandon, Ajay (Dr) | |
| dc.contributor.author | Woldeyes, Mulu | |
| dc.date.accessioned | 2021-11-12T11:13:15Z | |
| dc.date.accessioned | 2023-11-04T10:31:55Z | |
| dc.date.available | 2021-11-12T11:13:15Z | |
| dc.date.available | 2023-11-04T10:31:55Z | |
| dc.date.issued | 1999-06 | |
| dc.description.abstract | This paper attempts to examine the effect of one of the major internal imbalances-budget deficit- on the similarly imbalance-the curr.ent. account deficit, both theoretically and empirically. Theoretically. It is found difficult to establish a direct relationship between the budget deficit and the current account. But a number of indirect channels through which the effect of the budget deficit on the current account is mediated have been identified. The indirect nature of the channels has bared us from hypothesizing the extent of the effect and the time period that it could take. Empirically, the granger causality tests revealed that not only does the budget deficit cause the current account deficit but also the current account deficit is found to cause budget deficit. While it is interesting to find that current account deficits can cause budget deficits as well, finding a valuable theoretical support for this causation has remained elusive. The two stage least square regression and lime series modeling exercise results showed that budget deficit does have u strong and significant effect on the current account deficit both in the short and long run. Approximately, more than half of the change in the budget deficit is found to spill over to the same direction change in the current account deficit. This findings of the study, thus, strongly supports the notion that fiscal adjustment should be taken as a prerequisite for current account imbalance adjustment | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/28629 | |
| dc.language.iso | en | en_US |
| dc.publisher | A.A.U | en_US |
| dc.subject | Budget | en_US |
| dc.subject | Current Account | en_US |
| dc.subject | Ethiopia | en_US |
| dc.subject | Evidence | en_US |
| dc.title | The Effect of Government Budget on Current Account: Evidence from Ethiopia | en_US |
| dc.type | Thesis | en_US |