FURTHER ANALYSIS OF THE TWIN DEFICITS
作者:
BASUDEB BISWAS,
GOPAL TRIBEDY,
PETER SAUNDERS,
期刊:
Contemporary Economic Policy
(WILEY Available online 1992)
卷期:
Volume 10,
issue 1
页码: 104-107
ISSN:1074-3529
年代: 1992
DOI:10.1111/j.1465-7287.1992.tb00217.x
出版商: Blackwell Publishing Ltd
数据来源: WILEY
摘要:
In a 1989 Contemporary Policy Issues article Miller and Russek published findings of a causal relation between the fiscal deficit and the trade deficit. However, they found no overwhelming support for reverse causation between the twin deficits. The authors of the analysis here gathered annual data on U.S. federal budget deficits and net exports for 1950–1988 and deflated the nominal values by the GDP deflators to examine the causal relation based on real values. They made a distinction between structural and actual budget deficits. Instead of an arbitrary choice of lag structure, they used Hsiao (1979, 1981) minimum final prediction error criterion to determine the optimum lag lengths of the explanatory variables. The analysis reveals a unidirectional causal relation running from structural budget deficits to net exports, confirming some of Miller and Russek's findings. Contrary to Miller and Russek's conclusions, however, findings here indicate a bi‐directional causal relation between actual budget deficits and net exports. These findings suggest important policy implicati
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