Journal ArticleDOI
Twin deficits during the 1980s: An empirical investigation☆
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In this article, the authors examined the linkages between federal budget deficits and merchandise trade deficits using multivariate time series analysis and found that the two deficits are connected through the transmission mechanisms of interest rates and exchange rates.About:
This article is published in Journal of Macroeconomics.The article was published on 1990-12-01. It has received 222 citations till now. The article focuses on the topics: Twin deficits hypothesis & Deficit spending.read more
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Institutional quality and trade: which institutions? Which trade?
TL;DR: This article examined the extent to which different dimensions of the institutional framework affect total exports, exports of manufactured goods, and exports of non-manufactured goods in a panel of countries over 1990-2000.
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Causality tests of budget and current account deficits: cross-country comparisons
Ahmed M. Khalid,Teo Wee Guan +1 more
TL;DR: In this paper, the causal relationship between budget and current account deficits as well as the direction of such causality is investigated. But, the results do not support any long-run relationship between the two deficits for developed countries while the data for developing countries do not reject such a relationship.
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The twin deficits phenomenon: evidence from Greece
TL;DR: In this article, the authors explored the relationship between budget and trade deficits in a small open economy using annual data and found that budget deficit has short and long-run positive and significant causal effects on trade deficit.
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Twin deficits in the G-7 countries and global structural imbalances
TL;DR: In this article, the authors review and extend the theoretical analysis of the twin deficits and then confirm this relationship empirically for the G-7 countries over the past three decades. But they do not consider the effect of capital inflow on the two deficits.
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Current account dynamics and expected future budget deficits: some international evidence
TL;DR: In this paper, the authors use an optimizing general equilibrium model to show the theoretical relationship between the two deficits and estimate the econometric equation based on the forward-looking expectations model for OECD countries, thus extending earlier research based on more conventional analysis.
References
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Investigating Causal Relations by Econometric Models and Cross-Spectral Methods
TL;DR: In this article, the cross spectrum between two variables can be decomposed into two parts, each relating to a single causal arm of a feedback situation, and measures of causal lag and causal strength can then be constructed.
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Macroeconomics and reality
TL;DR: In this article, the authors argue that the style in which their builders construct claims for a connection between these models and reality is inappropriate, to the point at which claims for identification in these models cannot be taken seriously.
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Expectations and Exchange Rate Dynamics
TL;DR: In this paper, the authors developed a theory of exchange rate movements under perfect capital mobility, a slow adjustment of goods markets relative to asset markets, and consistent expectations, and showed that along that path a monetary expansion causes the exchange rate to depreciate.
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Autoregressive modelling and money-income causality detection
TL;DR: In this paper, a step-wise procedure based on Granger's concept of causality and Abaike's final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process.