العلاقة بين عجزي الموازنة و الحساب الجاري في المملكة العربية السعودية

Abstract EN

This paper examines the relationship between budget deficit and current account deficits in the Saudi economy.

Annual data covering the period 1970-1999 are used.

The paper discusses the theoretical basis of the twin deficit.

The Ricardian equivalence argues the absence of any relationship between the deficits, while the Keynesian proposition affirms that budget deficit led to current account deficit.

Econometric investigations reveal that budget and current account deficits are cointegrated.

The application of the ECM and the Johansen cointegration confirms a short and long run relationship among the deficits.

But, Granger causality test asserts that current account deficit causes budget deficit and budget deficit causes trade deficit.

So, in oil economy, neither the Ricardian equivalence nor the Keynesian proposition is valid.

The two deficits are positively linked, but there is a bi- direction causality between current account deficit and budget