Determinants of the double deficit in Argentina and its economic and financial effects for the period (1995-2021)

Abstract

The research shows whether there is a causal relationship between the budget deficit and the current account deficit in Argentina, and if so, what is the form of this relationship? Is it unilateral or bilateral? The aim of the research is to demonstrate the impact of both the budget deficit and the current account deficit on the economies of the selected countries and to explain the nature of the structural imbalances that they cause. The two deficits in those countries, and the research hypothesis was based on finding an uncontrolled relationship between the budget deficit and the current account deficit in Argentina during the study period. The research came out with several conclusions, the most important of which are: the existence of a direct and significant relationship between inflation and the general budget deficit. This means that an increase in inflation by (1%) leads to an increase in the general budget deficit by (0.167%) at a significant level (1%), and the existence of a direct relationship. and significant between public revenues and the public budget deficit. This means that an increase in public revenues by (1%) leads to an increase in the public budget deficit by (1.15%) at a significant level (1%), and the existence of an inverse and significant relationship between public expenditures and the public budget deficit. This means that an increase in public expenditures by (1%) leads to an increase in the public budget deficit by (-1.20%) at a significant level (1%).