Twin Deficit in Nigeria: A Re-Examination

Amaghionyeodiwe, Lloyd Ahamefule and Akinyemi, Opeyemi (2015) Twin Deficit in Nigeria: A Re-Examination. Journal of Economic and Social Studies, 5 (2). pp. 149-179.

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Abstract

This study re-examines the long run relationship between the budget and current account deficits in an oil-dependent open economy like Nigeria using a multivariate Granger causality test within the VECM framework. This result confirmed the existence of a long run relationship between the budget and current account deficit in Nigeria, thus supporting the Mudell-Fleming theory and refuting the Ricardian Equivalence Hypothesis (REH). The causality result indicates no causality between budget deficit and current account while the current account deficit causes budget account deficit. This implies that reduction in the current account deficits will help reduce the “twin deficit” dilemma.

Item Type:	Article
Uncontrolled Keywords:	Budget Deficits; Current Account Deficits; Multivariate Granger Causality; Oil- Dependent Open Economy; Nigeria
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User:	Mrs Patricia Nwokealisi
Date Deposited:	22 Aug 2016 14:53
Last Modified:	22 Aug 2016 14:53
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/6948

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