Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/21492 |
Resumo: | We study the relationship between the government budget balance and the current account balance for Portugal, using quarterly data from 1999 to 2019. On the one hand, the causality tests find a unidirectional relation running from the current account balance to the government budget balance. On the other hand, IV estimations show a bi-directional relationship between these variables, and the existence of a bilateral relationship between the structural components of both balances. Even so, the policy implication is that the use of fiscal policy to correct the external imbalance, especially in an economic crisis, is not substantial, due to the small size of the estimated impact. In addition, with an ARDL model, we find a negative long run relationship between the share of public consumption on GDP and the current account balance. As expected, the variation of real public consumption produces an adverse accumulated response on the current account balance. Finally, the investment rate negatively affects the cyclical component of the current account balance and contributes to the structural improvement of the budget balance. |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugalbudget balanceexternal balancecurrent account targeting hypothesistwin deficitsgovernment consumptionARDLcausalityVARPortugalWe study the relationship between the government budget balance and the current account balance for Portugal, using quarterly data from 1999 to 2019. On the one hand, the causality tests find a unidirectional relation running from the current account balance to the government budget balance. On the other hand, IV estimations show a bi-directional relationship between these variables, and the existence of a bilateral relationship between the structural components of both balances. Even so, the policy implication is that the use of fiscal policy to correct the external imbalance, especially in an economic crisis, is not substantial, due to the small size of the estimated impact. In addition, with an ARDL model, we find a negative long run relationship between the share of public consumption on GDP and the current account balance. As expected, the variation of real public consumption produces an adverse accumulated response on the current account balance. Finally, the investment rate negatively affects the cyclical component of the current account balance and contributes to the structural improvement of the budget balance.Instituto Superior de Economia e GestãoRepositório da Universidade de LisboaAfonso, AntónioCoelho, José Carlos2021-06-21T10:02:11Z2021-062021-06-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/21492engAfonso, António e José Carlos Coelho (2021). "Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal". Instituto Superior de Economia e Gestão – REM Working paper nº 0182 – 20212184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:50:57Zoai:www.repository.utl.pt:10400.5/21492Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:06:04.268795Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
title |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
spellingShingle |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal Afonso, António budget balance external balance current account targeting hypothesis twin deficits government consumption ARDL causality VAR Portugal |
title_short |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
title_full |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
title_fullStr |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
title_full_unstemmed |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
title_sort |
Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal |
author |
Afonso, António |
author_facet |
Afonso, António Coelho, José Carlos |
author_role |
author |
author2 |
Coelho, José Carlos |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Afonso, António Coelho, José Carlos |
dc.subject.por.fl_str_mv |
budget balance external balance current account targeting hypothesis twin deficits government consumption ARDL causality VAR Portugal |
topic |
budget balance external balance current account targeting hypothesis twin deficits government consumption ARDL causality VAR Portugal |
description |
We study the relationship between the government budget balance and the current account balance for Portugal, using quarterly data from 1999 to 2019. On the one hand, the causality tests find a unidirectional relation running from the current account balance to the government budget balance. On the other hand, IV estimations show a bi-directional relationship between these variables, and the existence of a bilateral relationship between the structural components of both balances. Even so, the policy implication is that the use of fiscal policy to correct the external imbalance, especially in an economic crisis, is not substantial, due to the small size of the estimated impact. In addition, with an ARDL model, we find a negative long run relationship between the share of public consumption on GDP and the current account balance. As expected, the variation of real public consumption produces an adverse accumulated response on the current account balance. Finally, the investment rate negatively affects the cyclical component of the current account balance and contributes to the structural improvement of the budget balance. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-06-21T10:02:11Z 2021-06 2021-06-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/21492 |
url |
http://hdl.handle.net/10400.5/21492 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Afonso, António e José Carlos Coelho (2021). "Current account targeting hypothesis versus twin deficit hypothesis : the EMU experience of Portugal". Instituto Superior de Economia e Gestão – REM Working paper nº 0182 – 2021 2184-108X |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Instituto Superior de Economia e Gestão |
publisher.none.fl_str_mv |
Instituto Superior de Economia e Gestão |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799131153099128832 |