DO BUDGET DEFICITS CAUSE CAPITAL INFLOWS - EVIDENCE FROM THE UNITED-STATES

Authors
BAHMANIOSKOOEE M PAYESTEH S
Citation
M. Bahmanioskooee et S. Payesteh, DO BUDGET DEFICITS CAUSE CAPITAL INFLOWS - EVIDENCE FROM THE UNITED-STATES, The Quarterly review of economics and finance, 34(1), 1994, pp. 63-74
Citations number
34
Categorie Soggetti
Business Finance",Economics
Journal title
The Quarterly review of economics and finance → ACNP
ISSN journal
10629769
Volume
34
Issue
1
Year of publication
1994
Pages
63 - 74
Database
ISI
SICI code
1062-9769(1994)34:1<63:DBDCCI>2.0.ZU;2-U
Abstract
In this research article, following the literature, we argue that budg et deficits that raise interest rates, can cause capital inflow. Using quarterly data over 1973-1988 period, cointegration technique is used to establish the long-run relationship between budget deficits and ca pital flows into the U.S. Results from error-correction modeling indic ate that there exist bidirectional causality between two variables.