Twin deficits: squaring theory, evidence and common sense
研究财政冲击如何通过贸易条件变化影响经常账户，发现经济开放度越高、财政冲击越持久，双赤字越可能发生；对美英等四国数据估计VAR模型，结果显示美国财政紧缩对其外部赤字影响有限。
type="main" xml:lang="en"> Simple accounting suggests that shocks to the government budget move the current account in the same direction, and this ‘twin deficits’ intuition leads many observers to call for fiscal consolidation in the US as a necessary measure to reduce the large external imbalance of this country. The response of other macroeconomic variables to budget developments, however, has important implications for ‘twin deficits’ and for this policy prescription. Focusing on the international transmission of fiscal policy shocks via terms of trade changes, we show that the likelihood and magnitude of twin deficits increases with the degree of openness of an economy, and decreases with the persistence of fiscal shocks. We take this insight to the data and investigate the transmission of fiscal shocks in a vector autoregression (VAR) model estimated for Australia, Canada, the UK and the US. We find that in less open countries the external impact of shocks to either government spending or budget deficits is limited, while private investment responds in line with our theoretical prediction. These results suggest that a fiscal retrenchment in the US may have a limited impact on its current external deficit. — Giancarlo Corsetti and Gernot J. Müller