In this study, the validity of the twin deficit hypothesis Fragile Five (Brazil, Indonesia, South Africa, India and Turkey) have been investigated for their country. Panel data methods were used in the study, which was handled for the period 2000-2017. Twin deficits can be an important problem for the fragile fives of countries with high current account deficits and budget deficits to form an effective and sustainable fiscal and monetary policy. Within the scope of the study, CADF and SURADF tests, one of the unit root tests that take into account horizontal cross-section dependency, were used. Stability at the level and level could not be achieved in all countries. Therefore, Westerlund Error Correction Model, which is one of the non-stationary panel data models, was preferred. Pooled Average Group Estimator and Pooled Average Group Estimator for Units were used to estimate short and long term parameters. According to empirical results, 1% increase in the budget deficit leads to 0.34% increase in the current account deficit in the long term. it is concluded that the twin deficits hypothesis is valid within the framework of Conventional Keynesian Theory.
Key Words: Twin Deficit, Debt deficit, Current Account Deficit, Non-Stationary Panel Data Models, Fragile Five Countries
JEL Classification: C33, F30, H62
Publication Date : March 24, 2020
|APA||Baş, S . (2020). İkiz Açık Hipotezinin Geçerliliğinin Kırılgan Beşli Ülkeleri İçin Test Edilmesi . Yönetim ve Ekonomi: Celal Bayar Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi , 27 (1) , 143-158 . DOI: 10.18657/yonveek.690774|