Twin Deficits In Developing Economies

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Twin Deficits In Developing Economies

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Author : Davide Furceri
language : en
Publisher: International Monetary Fund
Release Date : 2018-07-27

Twin Deficits In Developing Economies written by Davide Furceri and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-07-27 with Business & Economics categories.

This paper provides new evidence on the existence and magnitude of the “twin deficits” in developing economies. It finds that a one percent of GDP unanticipated increase in the government budget balance improves, on average, the current account balance by 0.8 percentage point of GDP. This effect is substantially larger than that obtained using standard measures of fiscal impulse, such as the cyclically-adjusted budget balance. The results point to heterogeneity across countries and over time. The effect tends to be larger: (i) during recessions; in countries (ii) that are more open to trade; (iii) that have less flexible exchange rate regimes; and (iv) with lower initial public debt-to-GDP ratios.

Beyond The Twin Deficits A Trade Strategy For The 1990 S

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Author : Robert A. Blecker
language : en
Publisher: Routledge
Release Date : 2016-09-16

Beyond The Twin Deficits A Trade Strategy For The 1990 S written by Robert A. Blecker and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-09-16 with Business & Economics categories.

This study documents evidence of a decline trend in the international competitiveness of US industry. The analysis identifies three groups of countries that account for most of the US trade deficit in the 1980s: the surplus countries, Germany and Japan; the East Asian NICs; and the Latin American debtors. In each case the author points to underlying structural problems contributing to the deficit. They call for quite different US policy responses, including microeconomic and industrial policies, incentives to revive productivity, growth and technological innovation, import surcharges, wage increases in the NICs, currency realignments, US capital exports, and debt relief. A pragmatic policy approach, with efforts to open foreign markets, aims to achieve the greatest possible reduction in the trade deficit with the lowest possible cost from macroeconomic adjustments. The author urges the reversal of two adverse trends in his policy strategy: the decline in public sector investment and the decreasing progressivity of the tax code.

Macromodeling Debt And Twin Deficits

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Author : Wan Latifah
language : en
Publisher: Xlibris Corporation
Release Date : 2014-09-10

Macromodeling Debt And Twin Deficits written by Wan Latifah and has been published by Xlibris Corporation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-09-10 with Business & Economics categories.

Debt is an important form of financing economic development, especially external debt is in the form of foreign exchange inflows. Exports may not bring in the necessary amount of foreign exchange needed for more imports, or foreign direct investment may not be sufficient for rapid economic development. Debt may bring in benefits/profits or may become a problem of liquidity or solvency. Debt is profitable when its usage brings in discounted streams of rates of return greater than its discounted streams of costs. Illiquidity is a short-run inadequacy of foreign exchange whereas solvency is a long-run problem in the same respect. Debt crisis - a long run solvency problem - refers to a situation where a country or a region undergo rescheduling; i.e. postponement of interest and principal repayments as a result of inability to repay debt. Rescheduling occurs often through the process of negotiations between debtors and creditors. A country can also declare a moratorium which is more severe because it means repayments of interest or both interest and principal are stopped temporarily until creditors agree to negotiate. The 1980s marked a decade where there were developing country-wide debt problem. The nature of debt problem broadly differ among regions. The Latin American countries went into debt crisis due to excessive borrowings in the international credit markets including the Euro-currency market. The debt crisis in the African region predates that of the Latin Americans due to scarcity of foreign exchange earnings via exports. The ASEAN region has lesser debt problems of illiquidity in nature, thus perceived as creditworthy by over-viewers, facilitating more capital inflows in either the form of foreign investment or foreign debt.

An Empirical Investigation Of Twin Deficits Hypothesis For Six Emerging Countries

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Author : Pinar Deniz
language : en
Publisher:
Release Date : 2009

An Empirical Investigation Of Twin Deficits Hypothesis For Six Emerging Countries written by Pinar Deniz and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.

This paper aims to analyze Keynesian well-known twin deficits hypothesis for a group of emerging countries using quarterly data between 1996 and 2006. Twin deficits hypothesis argues that there is a positive relationship between budget deficit and trade deficit. Several papers have analyzed this relationship but reached no consensus on the existence of twin deficits. This study differing from traditional ones investigates the relationship by employing panel cointegration technique to six emerging markets. Our empirical results show that unlike studies employing traditional methods, twin deficits hypothesis is supported using advanced econometric techniques for the panel data.

Budget Deficits And Debt

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Author : Siamack Shojai
language : en
Publisher: Bloomsbury Publishing USA
Release Date : 1999-01-30

Budget Deficits And Debt written by Siamack Shojai and has been published by Bloomsbury Publishing USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-01-30 with Political Science categories.

This edited collection is a critical evaluation of the impact of fiscal imbalances on the economy of industrialized and developing countries as prepared by a diverse group of scholars involved in advanced research on public finance. Technical issues, economic consequences and the political economy of budget deficits and government debt are covered in one succinct volume. The work provides a balanced presentation of neo-classical views on measures of government deficits; the budget process and major budgetary legislation in the United States; and the impact of deficits on economic activity, exchange rates, inflation, financial markets, trade balance, and economic growth. It also examines the political economy of government budgets in the OECD, select developing economies, and South Africa. From the 1950s to the 1980s, economic activity and growth were affected by fiscal imbalances and excessive government activity in many countries. Although many actors have made retrenchment attempts, economic research has not resolved the conflicting arguments about the impact of fiscal imbalances on the global economy. This book provides a balanced presentation of all major issues related to the impact of fiscal activity on the economy.

Macroeconomics Of Fiscal Policy In Developing Countries

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Author : Raghbendra Jha
language : en
Publisher:
Release Date : 2001

Macroeconomics Of Fiscal Policy In Developing Countries written by Raghbendra Jha and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Debts, External categories.

Optimum Size Of Government Intervention

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Author : Ramesh Chandra Das
language : en
Publisher: Taylor & Francis
Release Date : 2021-08-17

Optimum Size Of Government Intervention written by Ramesh Chandra Das and has been published by Taylor & Francis this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-08-17 with Business & Economics categories.

This book critically examines the optimum range and duration of government interventions in the economic activities of a modern state based on theoretical and empirical frameworks, and assesses their role and extent in various economies. With a special focus on emerging economies across the globe, it discusses themes such as income growth; social sector development; good governance and economic progress; threshold limits; optimum budget policy and economic growth; sustainable distributional managements in public projects; food for work programs; agricultural infrastructure development; technological progress and economic growth; and distributional equities. The policy suggestions provided here offer helpful blueprints for developmental projects. Rich in data and figures, the book addresses sector-specific case studies like healthcare; irrigation and agriculture; infrastructure; taxation and economic growth; and public sector enterprises. It will be an excellent read for scholars and researchers of economics, Indian economics, macroeconomics, political economy, public policy, political science and management, development studies, development economy and governance. It will also be useful to policymakers, administrative officials, and government and corporate bodies.

Validating Twin Deficit Hypotheses

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Author : Kenneth Mahuni
language : en
Publisher:
Release Date : 2016

Validating Twin Deficit Hypotheses written by Kenneth Mahuni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.

The fundamental goal of the research was to verify if Twin Deficits Hypothesis holds for the economy of Zambia using Time Series data from 1980-2014. The current account and budget deficit were employed as key variables. The exchange rate was also used as a transmission mechanism to see how it contributes in the nexus. The empirical findings showed that there exist long run association between the current account deficit and the budget deficit after performing cointegration tests.Granger causality tests confirmed existence of twin deficits for Zambia. The results supported unidirectional reverse causality. The exchange rate was shown to be very significant in the long run than in the short run. The implosion of the time series as shown by the predicted cointegration equation implies that unless drastic measures to cure the deficits, using the current account as the major target variable, the twin deficits will persist for some time. The major policy implication of this research is that given Zambia as a primary Commodity Dependent Developing Country subsisting largely on copper revenues to sustain the economy, there is a need to move away from 'copper addiction' given volatility of earnings of primary commodities lately e.g. through diversification of the economy, import substitution among other strategies.

Fiscal Policy And The Current Account

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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2010-05-01

Fiscal Policy And The Current Account written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-05-01 with Business & Economics categories.

This paper examines the relationship between fiscal policy and the current account, drawing on a larger country sample than in previous studies and using panel regressions, vector autoregressions, and an analysis of large fiscal and external adjustments. On average, a strengthening in the fiscal balance by 1 percentage point of GDP is associated with a current account improvement of 0.2–0.3 percentage point of GDP. This association is as strong in emerging and low-income countries as it is in advanced economies; and significantly higher when output is above potential.

Expansionary Austerity New International Evidence

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Author : Mr.Daniel Leigh
language : en
Publisher: International Monetary Fund
Release Date : 2011-07-01

Expansionary Austerity New International Evidence written by Mr.Daniel Leigh and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-07-01 with Business & Economics categories.

This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.