Study reveals twin deficits impact economy in MENA countries
The article investigates the relationship between current account and budget deficits in eight MENA countries from 1990 to 2012. By analyzing the data, the researchers found that the causality between the deficits varies among the countries. For Kuwait and Egypt, a current account deficit leads to a budget deficit, while in Saudi Arabia, it's the other way around, supporting the twin deficit hypothesis. However, for other countries, like Saudi Arabia, there is no clear relationship between the two deficits, supporting the Ricadian equivalence hypothesis.