Abstract
This research note examines the impact of federal deficits on U.S. capital inflows. Expanding on the previous work of Bahmani-Oskooee and Payesteh (1994), we employ the relatively new maximum likelihood procedure developed byJohansen (1988) andjohansen andJuselius (1990) to do cointegration tests. The results find a long run relationship between budget deficits and capital inflows. In addition, findings from error-correlation modeling reveal that short-run disequilibria in financial markets are corrected very rapidly, suggesting that these markets are efficient.
| Original language | English |
|---|---|
| Pages (from-to) | 485-494 |
| Number of pages | 10 |
| Journal | Quarterly Review of Economics and Finance |
| Volume | 36 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 1996 |
| Externally published | Yes |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Finance
Cite this
The relationship between budget deficits and capital inflows : Further econometric evidence. / Murthy, Vasudeva N. R.; Phillips, Joseph M.
In: Quarterly Review of Economics and Finance, Vol. 36, No. 4, 12.1996, p. 485-494.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The relationship between budget deficits and capital inflows
T2 - Further econometric evidence
AU - Murthy, Vasudeva N. R.
AU - Phillips, Joseph M.
PY - 1996/12
Y1 - 1996/12
N2 - This research note examines the impact of federal deficits on U.S. capital inflows. Expanding on the previous work of Bahmani-Oskooee and Payesteh (1994), we employ the relatively new maximum likelihood procedure developed byJohansen (1988) andjohansen andJuselius (1990) to do cointegration tests. The results find a long run relationship between budget deficits and capital inflows. In addition, findings from error-correlation modeling reveal that short-run disequilibria in financial markets are corrected very rapidly, suggesting that these markets are efficient.
AB - This research note examines the impact of federal deficits on U.S. capital inflows. Expanding on the previous work of Bahmani-Oskooee and Payesteh (1994), we employ the relatively new maximum likelihood procedure developed byJohansen (1988) andjohansen andJuselius (1990) to do cointegration tests. The results find a long run relationship between budget deficits and capital inflows. In addition, findings from error-correlation modeling reveal that short-run disequilibria in financial markets are corrected very rapidly, suggesting that these markets are efficient.
UR - http://www.scopus.com/inward/record.url?scp=0041150131&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0041150131&partnerID=8YFLogxK
U2 - 10.1016/S1062-9769(96)90047-2
DO - 10.1016/S1062-9769(96)90047-2
M3 - Article
AN - SCOPUS:0041150131
VL - 36
SP - 485
EP - 494
JO - Quarterly Review of Economics and Finance
JF - Quarterly Review of Economics and Finance
SN - 1062-9769
IS - 4
ER -