Study of twin deficits in selected countries of the Middle East and North Africa

The impact of Economic variabls on the trade deficit in addition to determine the existence and the trade deficit countinuation, and shows how to develop and adopt appropriate macroeconomic policies as well as to achieve equilibrium in the external sector and reduce the trade deficit. One of the variables that can affect a country's trade deficit is government budget deficit. This paper discusses the existence of twin deficits deals in the Middle East and North Africa over the period 2000-2012. The hypothesis presented in this study is that, budget deficit will significantly effect on the trade balance deficit in the Middle East and North Africa. To test this hypothesis, the panel data analysis is used, where the existence of twin deficits in the Middle East and North Africa is examined. During the years 2000-2012, these results indicated that there exists a significant positive impact on the trade balance deficit.

Keywords:

twin deficit , trade deficit , panel data model , budget deficit