The Causality Between Trade And Budget Deficits In Kenya: Time Series Analysis (1970-2014)

In Kenya, there are few empirical studies that focus on the relationship between budget and trade deficit. The existing empirical studies used panel and cross-section data to examine the relationship between budget deficit and trade deficit. The findings of these studies may not adequately capture the relationship between the two deficits since these countries have different levels of budget and trade deficits, different levels of economic development. In addition, the previous studies have not adequately addressed the problem of endogeneity. Further the findings of the previous results presen…