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

Analysis of budget deficit in the candidate countries for EU membership

“…The aim of the study conducted by Bolat et al (2014) is to examine whether there is a link between budget deficit, current account deficit and net savings and the existence of the problem of "triple deficit" in 15 European countries in the period 2002-2013. Results reflect the existence of twin deficit relation in some countries, and triple deficit relation in some other. Batavia et al (2013) presents a model of economic and financial implications for peripheral countries, called PIGS countries (Portugal, Ireland, Italy, Greece, and Spain).…”

Testing the Validity of the Triple Deficit Hypothesis for Nigeria

“…The study established evidence for the triple deficit hypothesis. In support ofŞengönül et al (2014), Bolat et al (2014) validated that the triple deficit hypothesis was valid for Poland, Portugal, Spain, and Sweden in their study of European Union countries between 2002 and 2013 using quarterly data for analysis. Contrary to these studies, Domenech et al (2000) found an absence of a causal relationship between fiscal deficit and saving deficit using panel VAR analysis between 1962 and 1994, establishing that the Ricardian Equivalence Hypothesis was valid in these countries contrary to conventional approaches and concluded that the triple deficit hypothesis was not valid.…”

“…Given that the panel data provides a time series on each cross-section unit in a group, this study further reviewed studies on panel data. Bolat et al (2014) assessed the dynamics of the triple deficit theory in 23 European economies using quarterly data between 2002 and 2013 and with the aid of the panel Granger causality estimation. The study established evidence for the triple deficit hypothesis.…”

Analysis of Twin Deficit Problem and Feldstein-Horioka Hypothesis: An Empirical Investigation for Oecd Countries

“…This result, combined with persistent fiscal deficits, could boost inflation expectations. Domestic currency owners, therefore, demand higher returns to hedge against inflation risk (Bolat et al, 2014). Bolat et al (2011) examined the short-and long-term relationship between budget deficit and current account deficit by using the boundary test method.…”

“…For the period of 1980-2009, quarterly data were used for nine African countries, and six of the nine countries examined had a long-term positive cointegration relationship, and no such relationship was found for the other three countries (Ahmad et al, 2015). Bolat et al (2014) have tested the relationship between budget deficit, current account deficit, and net savings to identify the problem of "triple deficit" in 15 European countries. To measure the causality between net savings, budget, and current account deficit, Hacker and Hatemi-j ( 2006) bootstrap causality test were applied for the period of 2002: Q1-2013: Q3.…”