Abstract:

The existence of the relationship between the budget gap and the currency gap and the causal relationship between the budget gap and the currency gap and the currency gap and the currency gap and the currency gap and the currency gap and the currency gap. In this study, the presence of double open hypothesis in the vulnerable five countries where the negative impact of international capital movements on national currencies and the insufficient internal savings make it difficult to finance currency disadvantages has been tested by panel causality analysis Dumitrescu-Hurlin (2016). The fragile five countries are the economies of Brazil, India, Indonesia, Turkey and South Africa, which have lost value in national currencies after the volatilities in the currency and capital markets in 2013. In the analysis covering the period 2000-2018, Panel Causal Analysis results of Dumitrescu-Hurlin (2016) indicate the existence of an unilateral relationship between budget gap and financial gap. According to the results of causality analysis, the direction of causality is true from the curriculum to the budget gap. Therefore, the double-open hypothesis is not applicable for the vulnerable five countries during the examined period.

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