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Twin Deficits in Suriname: An Empirical Analysis

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  • Tjon Kie Sim-Balker, Peggy
  • Mungroo, Albert
  • Piqué-Lont, Natalie
  • Ooft, Gavin

Abstract

This study investigates the relationship and directionality between the overall fiscal balance and the external current account balance of Suriname during 1970 - 2011. Both balances predominantly show deficits, however since 2006 the external current account balance shows surpluses due to the diversification of the mining sector as a result of booming international commodity prices. A vector error correction framework indicated the existence of a long-run relationship between these two variables. In the long run a bidirectional relation was found between the two balances, while in the short run no significant effect was encountered.

Suggested Citation

  • Tjon Kie Sim-Balker, Peggy & Mungroo, Albert & Piqué-Lont, Natalie & Ooft, Gavin, 2014. "Twin Deficits in Suriname: An Empirical Analysis," EconStor Preprints 215532, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:215532
    Note: The views expressed in this research paper are those of the authors and do not necessarily represent those of the Centrale Bank van Suriname. Research papers describe research in progress by the authors and are published to elicit comments and to further debate.
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    References listed on IDEAS

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    More about this item

    Keywords

    Twin Deficits; Budget Balance; Current Account Balance;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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