Déficits Gêmeos no Brasil: Qual a Relação de Causalidade?

Abstract

This paper aims at analyzing the causality relationships between thetwin deficits in Brazil, that is, if either current account movements impactpublic accounts, or vice-versa. The econometric methodology applied isrelated to the estimation of Autoregressive Distributed Lag models for thequarterly data ranging from 1999 to 2013. The results show a long-termrelationship from current account and GDP to public sector primary sur-plus. Regarding the short term, the error correction mechanism indicates causality going from the current account to the primary results. On theother hand, the opposite causality could not be found.