Brixiova, Zuzana (Dr.)Azene, . Abebe2021-10-012023-11-042021-10-012023-11-042008-06http://etd.aau.edu.et/handle/123456789/28025Many economists have argued that prolonged fiscal expansions Contribute to current account imbalances. The purpose of this paper is to Explore this phenomenon in the case of Sub-Saharan Africa countries During the period 1980 to 2007. In the framework of panel co integration test, panel VAR Granger Causality analysis and a reduced-form Consumption function, the paper evaluates the validity of the Conventional (Keynesian) view and the Ricardian Equivalence Hypothesis is In Sub-Saharan Africa economies. The major findings of this study are: First, as a priori expectation, a unidirectional causality that runs from Current account deficits to budget deficits (termed as current account Targeting by summers (1988)) has been found for oil-importing Sub Saharan Africa countries. In these countries exchange rate is found to be The main mediating variable in linking the two deficits. Second, for oil exporting Countries, while the findings from Granger causality test is in Accordance with the Ricardian Equivalence Hypothesis, the restriction test from the estimation result of the reduced-form consumption function Shows rejection of the pure Equivalence Hypothesis. One line of Argument for the acceptance of the Keynesian Proposition for oil exporting Countries is that a rising consumption (both private and Government) fueled by rising oil revenues eventually leads to current Account deterioration. A policy implication resulting from these findings Is that managing the current account deficit as well as the debt burden Offers a scope for improvement in the budget deficits.enA dynamic Panel VAR ModelingBudget Deficits Link in Sub-SaharanThesis