Budget and trade deficits linked to economic theories in MENA countries.
The article looks at how budget deficits and trade deficits are related in some MENA countries. They studied data from 1971-2000 (and for Iran from 1959-2003) using different tests. The results show that in Iran, Jordan, Kuwait, Morocco, Oman, and Tunisia, people tend to save more when the government spends more (Ricardian Equivalence). But in Egypt, Bahrain, Oman, and Turkey, when the government spends more, people tend to spend more too (Keynesian proposition).