Abstract
This study investigates the effect of budget deficit on the economic growth of Afghanistan, for this purpose, the quarterly time-series data from the period 2003 to 2017 have been used. To test time-series properties and selection of the model, Hylleberg-Engle-Granger-Yoo (HEGY) and Augmented Dickey-Fuller (ADF) Unit root test has been employed. The long-run relationship between dependent and explanatory variables has been verified by using the Autoregressive Distributed Lag (ARDL) bounds test. Based on the time series data ARDL model has been used. This study found that all variables became stationary at a 5% level of significance at the level and first difference. The empirical findings reveal a positive and significant long-run relationship between budget deficit and economic growth of Afghanistan, consistent to the Keynesian Hypothesis.
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Article Details
- Year: 2022
- Volume: 43
- Issue: 3
- Pages: 163 - 182
- Accepted: 27.06.2022
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DOI:
https://doi.org/10.5281/zenodo.16926963 -
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How to Cite?
Sayed Sherullah Sadat, Reza Najarzadeh, Lotfali Agheli (2022). The Impact of Budget Deficit on Economic Growth of Afghanistan. Journal of Economic Cooperation and Development, 43(3), 163-182. https://doi.org/10.5281/zenodo.16926963
