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EFFECT OF GOVERNMENT FISCAL DEFICITS ON CURRENT ACCOUNT BALANCE: THE CASE OF TWIN DEFICITS HYPOTHESIS IN NIGERIA (1970-2013)

The study investigates effect of government fiscal deficits on Current Account Balance (CAB) proxied by balance of payments. Because of inter-linkages with other macroeconomic variables, exchange rate and interest rates are incorporated into the investigation. The study was based on secondary data. Times series data of GDP Fiscal Deficit, real exchange rate and real interest rate for 1970-2013 was obtained from Central Bank of Nigeria (CBN) statistical Bulletin. The data was analyzed for Unit Root using ADF and P-P and cointegration using Johansen technique. Hypotheses were tested by Ordinary …

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