An empirical analysis of the nexus between current account deficit and budget deficit: the case of Tunisia

An empirical analysis of the nexus between current account deficit and budget deficit: the case of Tunisia | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article An empirical analysis of the nexus between current account deficit and budget deficit: the case of Tunisia Makrem Ben Doudou This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8530701/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study investigates the causal relationships between current account deficit and budget deficit using annual data for Tunisia over the 1986-2018 period. The analysis relies on the ARDL-bounds testing approach to cointegration of Pesaran, Smith and Shin (2001), and the Granger non-causality tests of Toda and Yamamoto (1995). The ARDL procedure confirms the existence of long-run and short-run relationships between the current account deficit and the budget deficit. Besides, Granger non-causality tests upheld the presence of the twin deficit hypothesis. Our empirical findings hold important policy implications; they suggest that the Tunisian government should implement a range of measures aimed at reducing the budget deficit in order to help correct the current account deficit. JEL Classifications: C32, E62, F32, H62 International Economics Macroeconomics current account deficit budget deficit twin deficits hypothesis ARDL approach Toda-Yamamoto causality test Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8530701","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":570173671,"identity":"2931eba1-301c-4dd6-8599-be9b34a1f223","order_by":0,"name":"Makrem Ben 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