Table 7 Direction of short- and long-run... | Emerald Publishing

Table 7

Direction of short- and long-run causality

No	Null hypothesis	Short run	Long run
1	Current account does not Granger cause fiscal deficits	$C A B \neq D E F I C I T$	$C A B \to D E F I C I T$
2	Fiscal deficits do not Granger cause current account	$D E F I C I T \neq C A B$	$D E F I C I T \to C A B$
3	Real GDP growth does not Granger cause fiscal deficits	$G R O W T H \to D E F I C I T$	$GROWTH \to D E F I C I T$
4	Fiscal deficits do not Granger cause real GDP growth	$D E F I C I T \to G R O W T H$	$D E F I C I T \to G R O W T H$
5	Inflation does not Granger cause fiscal deficits	$I N F L A T I O N \neq D E F I C I T$	$I N F L A T I O N \to D E F I C I T$
6	Fiscal deficits do not Granger cause inflation	$D E F I C I T \neq I N F L A T I O N$	$D E F I C I T \to I N F L A T I O N$
7	Interest rate differential does not Granger cause fiscal deficits	$L R A T E \neq D E F I C I T$	$L R A T E \to D E F I C I T$
8	Fiscal deficits do not Granger cause interest rate differential	$D E F I C I T \neq L R A T E$	$D E F I C I T \to L R A T E$
9	Grants do not Granger cause fiscal deficits	$G R A N T \to D E F I C I T$	$G R A N T \to D E F I C I T$
10	Fiscal deficits do not Granger cause grants	$D E F I C I T \to G R A N T$	$D E F I C I T \to G R A N T$
11	Debt service does not Granger cause fiscal deficits	$D E B T \neq D E F I C I T$	$D E B T \to D E F I C I T$
12	Fiscal deficits do not Granger cause debt service	$D E F I C I T \neq D E B T$	$D E F I C I T \to D E B T$

No	Null hypothesis	Short run	Long run
1	Current account does not Granger cause fiscal deficits	$C A B \neq D E F I C I T$	$C A B \to D E F I C I T$
2	Fiscal deficits do not Granger cause current account	$D E F I C I T \neq C A B$	$D E F I C I T \to C A B$
3	Real GDP growth does not Granger cause fiscal deficits	$G R O W T H \to D E F I C I T$	$GROWTH \to D E F I C I T$
4	Fiscal deficits do not Granger cause real GDP growth	$D E F I C I T \to G R O W T H$	$D E F I C I T \to G R O W T H$
5	Inflation does not Granger cause fiscal deficits	$I N F L A T I O N \neq D E F I C I T$	$I N F L A T I O N \to D E F I C I T$
6	Fiscal deficits do not Granger cause inflation	$D E F I C I T \neq I N F L A T I O N$	$D E F I C I T \to I N F L A T I O N$
7	Interest rate differential does not Granger cause fiscal deficits	$L R A T E \neq D E F I C I T$	$L R A T E \to D E F I C I T$
8	Fiscal deficits do not Granger cause interest rate differential	$D E F I C I T \neq L R A T E$	$D E F I C I T \to L R A T E$
9	Grants do not Granger cause fiscal deficits	$G R A N T \to D E F I C I T$	$G R A N T \to D E F I C I T$
10	Fiscal deficits do not Granger cause grants	$D E F I C I T \to G R A N T$	$D E F I C I T \to G R A N T$
11	Debt service does not Granger cause fiscal deficits	$D E B T \neq D E F I C I T$	$D E B T \to D E F I C I T$
12	Fiscal deficits do not Granger cause debt service	$D E F I C I T \neq D E B T$	$D E F I C I T \to D E B T$

Note(s): Causality relationships: $\to$ denotes causality in indicated direction; $\neq$ denotes absence of causality

Source(s): Own elaboration