A Structural VAR analysis of Fiscal shocks on current accounts in Greece
The present study is, in particular, an attempt to test the relationship between budget deficit and current account balance in Greece, from 1976 to 2009, using a structural autoregressive (SVAR) model. We focused on Greece because this country has presented in the last years seriously fiscal changes...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2015-09-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1106.pdf
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| Summary: | The present study is, in particular, an attempt to test the relationship between
budget deficit and current account balance in Greece, from 1976 to 2009, using a
structural autoregressive (SVAR) model. We focused on Greece because this country has
presented in the last years seriously fiscal changes, and severely damage in the level of
macroeconomic variables. We find that in case of Greece there is no long run relationship
between budget deficit and current account deficit either in the presence or in absence of
structural breaks in the data set. Further, Impulse Response Functions (IRFs) calculated in
the framework of SVAR shows that increase in budget deficit increases the current account
deficit, which is consistent with the twin deficit hypothesis. |
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| ISSN: | 1841-8678 1844-0029 |