Study of the Impact of Government Expenditures on the Trade Balance of Afghanistan from 2005 to 2020

Abstract

The effects of government expenditures, which are the results of the implementation of government financial policies, on the current account balance, especially on the trade balance of Afghanistan, during the period from 2005 to 2020 have been investigated. The purpose of this research is to study and investigate the effects of government spending on Afghanistan's trade balance during specific periods of time. The information used in this research is from the official reports of the Ministry of Finance, Ministry of Economy, Ministry of Trade and Industry, National Administration of Statistics and Information, World Bank, magazines and books. The method used in this study is a simple regression model, which is taken to estimate the parameters of the model, the Autoregressive Distributed Lag. Also, for the use of information, the generalized Dickey-Fuller method of validity and invalidity of information was obtained, and invalid information was removed by differentiating their unit root and used later in the table. The results of this research show that there is no significant relationship between government expenditure and Afghanistan's trade balance. The lack of correlation between the variables of government expenditure and trade balance may be due to the higher volume of imports and lower volume of exports, the weak economic structure and the limited amount of Afghanistan's budget during the considered years.