Does Triple Deficits Have (Un) Stable Causality for the EU Members? Evidence from Bootstrap-Corrected Causality Tests


21st International Economic Conference of Sibiu - Prospects of Economic Recovery in a Volatile International Context - Major Obstacles, Initiatives and Projects (IECS), Sibiu, Romania, 16 - 17 May 2014, vol.16, pp.603-612 identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 16
  • Doi Number: 10.1016/s2212-5671(14)00847-8
  • City: Sibiu
  • Country: Romania
  • Page Numbers: pp.603-612


The determination of current account deficit based on budget deficit has been the focus of attention in EU countries recently. In a theoretical explanation, the Ricardian Equivalence and the Keynesian Hypothesis do not agree on this argument, and thus, researchers have sought to choose between these hypotheses. Besides, Feldstein-Horioka puzzle may emerge in trying to define twin deficits. In order to measure the direction of causality among net savings, budget and current account deficits, Hacker and Hatemi-j (2006) bootstrap causality test is applied for 2002: Q1-2013:Q3, and empirical results provide evidence on the twin and triple deficits for different EU countries. (C) 2014 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (