Social and Behavioral Sciences Commons^™

The Causality Between Budget Deficits And Interest Rates In Asean Countries, Janhavi Nerurkar

Empirical Economic Bulletin, An Undergraduate Journal

This paper investigates the correlation between budget deficits and interest rates across countries of varying income levels across Southeast Asia using the Granger-causality econometric model. It consists of a time series analysis of budget deficits (local currency unit) and real interest rates in Indonesia, Malaysia, Thailand, the Philippines and Singapore from 1990 to 2011.This analysis concludes that budget deficits and interest rates do not cause one another in the countries under consideration.