The effect of budget deficit on current account : case study (Palestinian territories 1996–2012)‎

Dissertant

Saidam, Ahmad Mahmud Musa

Thesis advisor

al-Nimruti, Khalil Ahmad Yusuf

Comitee Members

Safi, Samir Khalid Husayn
Abu Jami, Nasim Hasan

University

Islamic University

Faculty

Faculty of Commerce

Department

Department of Economics and Political Science

University Country

Palestine (Gaza Strip)

Degree

Master

Degree Date

2014

English Abstract

-This study aimed to examine the effect of public budget deficit account on the current account in the Palestinian territories for the period (1996 - 2012) in order to identify the nature of the relationship between both accounts, and to study the impact of government revenues and expenses on the Palestinian current account.

The main objectives of the study are to clarify the type of relationship between the public budget and the current account, and determine the appropriate economic and fiscal policies should adopt to reduce the chronic deficit in the current account.

Through study the nature and components of government expenditures and revenues.

In addition, to highlight the role of different Israeli policies have contributed to influence in the nature of all of the public budget and the current account.

Moreover, to show the negative role-played by the division between the West Bank and the Gaza Strip.

This study has reviewed many previous studies on this subject.

Moreover, the analytical descriptive approach adopted to analysis the components of the public budget and current account.

Then it used statistical analysis approach by using econometric models to illustrate the impact of public budget deficit on current account in the Palestinian territories.

This is after checking the stationary of time series by adopting unit root test using Augmented Dickey Fuller test.

After that, it was ensured that all economic variables included in the models have cointegration relationship at long-term by using Johansen cointegration method.

Findings of the study confirm the positive relationship between the public budget deficit and the current account in the Palestinian territories.

Whereas, the increase in the public budget deficit by one million U.S.

dollars, leading to increase a current account deficit of 3.08 million U.S.

dollars.

In addition the deficit in the trade balance increased by 465.3 thousand U.S.

dollars, when the other independent variables in the model remain constant, such as government and private investment.

The study also confirmed the important positive role played by government investment in reducing the current account deficit.

While the private investment shows negative impact on current account.

This was because of the nature of private investment, which depends highly on consumer imports.

The study provided a set of recommendations concerning government institutions, private sector, and academic institutions.

It should rationalize the public current expenditures, and reallocation larger part of public spending capital spending.

In addition to support and enhance the domestic productive base and to direct the private investment into productive projects that lead to imports substitution and then to increase exports.

Main Subjects

Economy and Commerce

Topics

• Balance of payments
• Case studies
• Palestine
• Budget deficits

No. of Pages

181

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-534753