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Macroeconomic variables and current account balance in an open economy : evidence from Namibia
Published Online:1 Jul 2019https://doi.org/10.10520/EJC-18882974d0https://hdl.handle.net/10520/EJC-18882974d0
Abstract
This paper investigates macroeconomic determinants of the current account balance in Namibia. The results show that there is evidence of twin deficit hypothesis in Namibia. Evidence of twin deficit hypothesis suggest that it is important for Namibia to have fiscal discipline in order to improve its current account. Increase in capital flows, real GDP or per capita, results in a deterioration of the current account. Increase in interest rate, commodity prices and population cause the current account balance to improve. This suggest that contractionary monetary policy contributed to reduction of unproductive imports and improved the current account balance.
