Cointegration Analysis of Triple Deficits: An Indicator Saturation Approach

The objective of this study to examine the econometric technique triple deficit’s hypothesis in existence multiple structural breaks. Triple deficit theory is a put forward by expanding twin theory, recognize private together with trade and budget investigate relationship among these under Keynesian approach. annual time series data has been used from 1975 2020. This applied techniques that captured impact breaks series. In we saturation approach (impulse indicator step saturation) for equilibrium correction model (EqCM) cointegration analysis. Results concluded static there positive between fiscal-deficit, deficit, trade-deficit breakpoints. dynamic model, exists both (short-term long-term) budget-deficit, presence three-step indicators. Therefore, control deficits government should make such type policies mitigates effects breaks, will atomically reduce adverse shocks sector financial sector.