Issue #4 (Volume 15 2026)

Type of the article: Research Article

Abstract
This study aims to identify the direction of Granger predictability between fiscal deficit, saving-investment gap, and external account imbalances in Jordan over the period 1976–2024. It seeks to better understand the interaction between internal macroeconomic imbalances and external sector disequilibria and their implications for long-term economic stability. To achieve this objective, the study first applied the Augmented Dickey–Fuller (ADF) unit root test, which revealed that the variables were not integrated of the same order. This finding limited the applicability of the traditional Granger causality approach. Accordingly, the study employed the Toda–Yamamoto Modified Wald (MWald) causality test, which does not require all variables to be integrated of the same order.
The empirical findings indicate significant predictive linkages between internal and external macroeconomic imbalances in Jordan. Specifically, the fiscal deficit Granger-predicts the current account, while the saving–investment gap Granger-predicts external debt. In addition, the current account, external debt, and foreign exchange reserves jointly Granger-predict the saving–investment gap, highlighting the interconnectedness between domestic and external macroeconomic conditions. The findings suggest that the relationship between internal and external imbalances in Jordan is more complex than implied by the conventional twin-deficit hypothesis and underscore the importance of the saving–investment gap as an important link between domestic and external macroeconomic conditions. Accordingly, the findings highlight the importance of coordinated macroeconomic policies for strengthening fiscal discipline, promoting domestic saving, and improving investment.

Type of the article: Research Article

Abstract
Budgetary decision-making in the defense sector involves making trade-offs between interdependent capabilities, subject to financial, operational and institutional constraints. The analysis of aggregate expenditure is insufficient to evaluate these decisions, as the impact of the allocated resources depends on their composition and the interplay between categories of expenditure. The study analyzes the budgetary headings of the Portuguese Navy between 2023 and 2025 and assesses their compatibility with an institutional utility function. To this end, possible adjusted structural model has been proposed, which includes the complementarity between maintenance and investment, the adequacy of personnel expenditure, potential performance and institutional stability. The robustness of the optimization was assessed through 200,000 Monte Carlo simulations, with simultaneous variation of parameters, thresholds and weights. Total expenditure increased by 20.66 per cent over the period, but the highest utility was achieved in 2024 (0.691554), followed by 2025 (0.683443) and 2023 (0.659761). The 2024 financial year ranked first in 91.64% of the simulations and outperformed 2023 in all configurations analyzed. However, alternative normalization of the maintenance-investment component altered the ranking to 2023 > 2024 > 2025, thereby distinguishing the model’s parametric robustness from its structural robustness. The model enables to explain budgetary commitments and test the stability of decisions, but it does not constitute a causal measure of operational readiness, efficiency or institutional risk. The model’s relevance lies in the transparent support it provides for comparing the various allocation alternatives.

Acknowledgment
This article is financed by CINAV–Navy Research Centre [CINAV–Centro de Investigação Naval].