Twin Deficits, Openness, and the Business Cycle
研究10个OECD国家政府预算余额与贸易余额在经济周期频率上的联动关系，发现两者负相关，但开放度越高负相关越弱；美国数据呈S形交叉相关函数。标准国际经济周期模型能解释这些规律，支出冲击会导致两者完全正相关，但开放度低时冲击对贸易余额影响有限。
In this article, we study the co-movement of the government budget balance and the trade balance at business-cycle frequencies. In a sample of 10 OECD countries we find that the correlation of the two time series is negative, but less so in more open economies. Moreover, for the U.S. the cross-correlation function is S-shaped. We analyze these regularities taking the perspective of international business cycle theory. First, we show that a standard model delivers predictions broadly in line with the evidence. Second, we show that conditional on spending shocks the model predicts a perfect correlation of the budget balance and the trade balance. The effect of spending shocks on the trade balance is contained, however, if an economy is not very open to trade.