08Sep 2018

THE RELATIONSHIP BETWEEN BUDGET DEFICIT AND INFLATION IN SYRIA FOR THE PERIOD (1990-2010).

  • Department of Financial.
  • Banking Sciences, Tishreen University, Lattakia, Syria.
Crossref Cited-by Linking logo
  • Abstract
  • Keywords
  • References
  • Cite This Article as
  • Corresponding Author

Government budget deficit has been one of the most critical issues in the countries\' historical economic problems. The budget deficit-inflation relationship is not always obvious and it varies between countries. This paper investigates the long-run and the short-run relationship between budget deficit and inflation in Syria, by using annual data for the period of 1990-2010. We employ johanson test approach of co-integration to investigate the long-run relationship between budget deficit and inflation within the Vector error-correction model (VECM). The empirical results suggest that there is significant and positive long-run relationship between budget deficit and inflation in Syria, while it does not exist on the short-run.


  1. Adinevand, Mehdi (2015). Effect of budget deficit on production, inflation and trade balance of Iran-Based on the synchronous equations? model. Bulletin of the Georgian National Academy of Scienses, Vol. 9 no. 1, PP. 246- 255.
  2. Afrin, Sadia (2013). Fiscal Deficits and Inflation: the case of Bangladesh. Chief Economists Unit (CEU) Working Paper Series: WP 1303, pp. 1-27.
  3. Ahmad, Muhammad; Sheikh, Muhammad; Tariq, Khadija (2012). Domestic Debt and Inflationary Effects: An Evidence from Pakistan. International Journal of Humanities and Social Science. Vol. 2 No. 18, PP. 256- 263.
  4. Ammama; Mughal, Khalid; Khan, Muhammad (2011). Fiscal deficit and its impact on inflation, Causality and Co-integration: The Experience of Pakistan (1960-2010). Far East Journal of Psychology and Business. Vol. 5 No. 3, pp. 51- 62.
  5. Boariu, Angela; Bilan, Irina (2007). Inflatinary Effects of Budget Deficit Financing in Contemporary Economies. Analele Ştiintifice Ale Universitatii, Alexandru Ioan Cuza? Din Iast, PP. 78- 82.
  6. Erkam, Serkan; Cetinkaya, Murat (2014). Budget Deficits and Inflation: Evidence from Turkey. The Macrotheme Review. Vol. 3 No. 8, PP. 12-22.
  7. Habibullah, Muzafar; Cheah, Chee; Baharom , A.H (2011). Budget Deficits and Inflation in Thirteen Asian Developing Countries. International Journal of Business and Social Science. Vol. 2 No. 9, PP. 192-204.
  8. Helmy, Omneia (2008). The Impact of Budget Deficit on Inflation in Egypt. The Egyption Center for Economic studies Working Paper 141, pp. 1-32.
  9. Koyuncu, Fatma (2014). Causality Network between Budget Deficit, Money Supply and Inflation: An Application to Turkey. International Journal of Business and Social Science. Vol. 5, No. 10(1), PP. 225- 235.
  10. Makochekanwa, Albert (2011). Impact of Budget Deficit on Inflation in Zimbabwe. The Economiic Researrch Guarrdiian. Vol. 1 No 2 , PP. 49- 59.
  11. Mansfield, Edwin; Behravesh, Nariman (2001). Economics U.S.A. USA: Norton & Company.
  12. Milo, Petraq (2012). The impact of the budget deficit on the currency and inflation in the transition economies. Journal of Central Banking Theory and Practice.1 , 25-57.
  13. Omoke P. C; Oruta L.I (2010). Budget Deficit, Money Supply and Inflation in Nigeria.European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 19.
  14. Pelesai, Audu; Oyinpreye, Apere (2013). Budget Deficit and Inflation among ECOWAS Countries: An Econometric Modeling. Public Policy and Administration Research. Vol.3, No.10, PP. 12- 21.
  15. Piontkivsky, R; Bakun, A; Kryshko, M; Sytnyk,T (2001). The Impact of the Budget Deficit on Inflation in Ukraine. International Centre for Policy Studies, PP.4- 33.
  16. Prammer, Doris; Reiss, Lukas (2015). Impact of Inflation on Fiscal Aggregates in Austria. Monetary Policy & the Economy, PP. 28-40.
  17. Rohlf, William D(2007). Introduction to Economic Reasoning. USA: Drury College.
  18. Sargent, T. and N. Wallace (1985). Some unpleasant. monetarist arithmetic. Federal Reserve Bank of Minneapolis Quarterly Review. Vol 2, PP. 15-31.
  19. Samimi, Ahmad; Jamshidbaygi, Sajad (2011). Budget Deficit and Inflation: A Sensitivity Analysis to Inflation and Money Supply in Iran. Middle-East Journal of Scientific Research. Vol. 8 1, PP. 257-260.
  20. Sanya, Ogunsakin; Sunday, Olalere (2017). Nexus Between Inflation and Budget Deficit: a Comparative Study Between Nigeria and South Africa. International Journal of Economics, Commerce and Management. Vol. 6 No. 8, PP. 98- 112.
 
  1. Saysombath, Phouthanouphet; Kyophilavong, Phouphet (2014). An Examination of the Causal Relationship between Budget Deficit and Inflation: a Case Study of Lao PDR. Journal of Social and Development Sciences. Vol. 5 No. 2, PP. 43-49.
  2. Serfraz, Ayesha; Anwar, Mumtaz (2009). Fiscal Imbalances and Inflation: A Case Study of Pakistan. Pakistan Journal of Social Sciences. Vol. 29 No. 1, PP. 39-50.
  3. Sims, C. A. (1994). A Simple Model for the Study of the Determination of the Price Level and the Interaction of Monetary and Fiscal Policy. Economic Theory. Vol. 4 No. 63 ,PP. 381-399.
  4. Sims, C. A. (1998). Econometric Implications of the Government Budget Constraint. Journal of Econometrics. No.83,PP. 9-19.
  5. Tiwari, Aviral; Tiwari, A.P (2011). Fiscal Deficit and Inflation: An empirical analysis for India. The Romanian Economic Journal. No. 42, PP: 131- 158.
  6. Tiwari, Aviral; Tiwari, A.P; Pandey, Bharti (2012). Fiscal Deficit and Inflation: What Cause What? The Case of India. Jornal of Business and Economy. No. 13(1), pp. 58-81.
  7. Vroey, ?Michel; Malgrange, Pierre (2011). The History of Macroeconomics from Keynes?s General Theory to the Present. IRES Discussion Paper, University of Louvain
  8. Woodford, M. (1994). Monetary Policy and Price-Level Determinacy in a Cash-in-Advance Economy. Economic Theory. Vol. 4,PP. 345-380.
  9. Woodford, M. (1995). Price-level Determinacy without Control of a Monetary Aggregate, Carnegie-Rochester Conference Series on Public Policy. No. 43,PP.1-46.
  10. Woodford, M. (1996). Control of the Public Debt: A Requirement for Price Stability, NBER Working Paper. No. 5684.
  11. Yien, Lim; Abdullah, Hussin; Azam, Muhammad (2017). Granger Causality Analysis between Inflation, Debt and Exchange Rate: Evidence from Malaysia. International Journal of Academic Research in Accounting, Finance and Management Sciences. Vol. 7 No. 1, PP. 189- 196.

[Fadia Ibrahim al Bouza and Samir Sharaf. (2018); THE RELATIONSHIP BETWEEN BUDGET DEFICIT AND INFLATION IN SYRIA FOR THE PERIOD (1990-2010). Int. J. of Adv. Res. 6 (9). 47-56] (ISSN 2320-5407). www.journalijar.com


Dr. Samir Sharaf
Tishreen University

DOI:


Article DOI: 10.21474/IJAR01/7644       DOI URL: http://dx.doi.org/10.21474/IJAR01/7644


Share this article