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