Since 1960, the national independence date, the current account and the budget of Senegal have been experiencing deficits, although many fiscal, trade and monetary policy reforms have been undertaken to address the situation. In the light of the twin deficits theory, we give evidence of correlation between budget deficit and current account deficit in Senegal, using the Johansen cointegration technique, on the period from 1974 to 2014. Then, using the Granger causality tests we give evidence of a two-way causality between the twin deficits on the one hand and an one-way causality from GDP to twin deficits on the other. However Senegal twin deficits are also related to its economic structures that are ones of a small dependent economy. (original abstract)
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