Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience
By extending the well-known twin deficits hypothesis, this study proposes a new testable hypothesis - “triple deficits hypothesis” from the general equilibrium perspective, which considers the third deficit of capital and financial account of balance of payment. An empirical l framework is conceptua...
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| Format: | Monograph |
| Language: | English |
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Department of Economics, Monash University, Australia
2014
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| Online Access: | http://eprints.um.edu.my/17132/1/2014_Tang_Triple_deficits.pdf |
| _version_ | 1825720909772619776 |
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| author | Tang, T.C. |
| author_facet | Tang, T.C. |
| author_sort | Tang, T.C. |
| collection | UM |
| description | By extending the well-known twin deficits hypothesis, this study proposes a new testable hypothesis - “triple deficits hypothesis” from the general equilibrium perspective, which considers the third deficit of capital and financial account of balance of payment. An empirical l framework is conceptually developed from income-expenditure approach for cointegration. Positive finding is confirmed by the U.S. data that fiscal balance, current account balance, and capital and financial account balance are moving together in the long-run, or to say that they are cointegrated. It is also interesting this study finds that current account does Granger-cause fiscal balance, as well as the U.S. financial account position. This study has relevant policy implications, in particularly the country is with twin deficits phenomenon. This seminal work is still preliminary, and a few of suggestions have been outlined for further study. |
| first_indexed | 2024-03-06T05:42:18Z |
| format | Monograph |
| id | um.eprints-17132 |
| institution | Universiti Malaya |
| language | English |
| last_indexed | 2024-03-06T05:42:18Z |
| publishDate | 2014 |
| publisher | Department of Economics, Monash University, Australia |
| record_format | dspace |
| spelling | um.eprints-171322017-10-03T04:10:43Z http://eprints.um.edu.my/17132/ Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience Tang, T.C. H Social Sciences (General) Statistical data Methodology Consumption. Demand Foreign exchange. International finance. By extending the well-known twin deficits hypothesis, this study proposes a new testable hypothesis - “triple deficits hypothesis” from the general equilibrium perspective, which considers the third deficit of capital and financial account of balance of payment. An empirical l framework is conceptually developed from income-expenditure approach for cointegration. Positive finding is confirmed by the U.S. data that fiscal balance, current account balance, and capital and financial account balance are moving together in the long-run, or to say that they are cointegrated. It is also interesting this study finds that current account does Granger-cause fiscal balance, as well as the U.S. financial account position. This study has relevant policy implications, in particularly the country is with twin deficits phenomenon. This seminal work is still preliminary, and a few of suggestions have been outlined for further study. Department of Economics, Monash University, Australia 2014 Monograph NonPeerReviewed application/pdf en http://eprints.um.edu.my/17132/1/2014_Tang_Triple_deficits.pdf Tang, T.C. (2014) Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience. Discussion Paper. Department of Economics, Monash University, Australia, Melbourne, Australia. http://business.monash.edu/economics/research/publications/2014/0614fiscaldeficittang.pdf |
| spellingShingle | H Social Sciences (General) Statistical data Methodology Consumption. Demand Foreign exchange. International finance. Tang, T.C. Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title | Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title_full | Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title_fullStr | Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title_full_unstemmed | Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title_short | Fiscal deficit, trade deficit, and financial account deficit: triple deficits hypothesis with the U.S. experience |
| title_sort | fiscal deficit trade deficit and financial account deficit triple deficits hypothesis with the u s experience |
| topic | H Social Sciences (General) Statistical data Methodology Consumption. Demand Foreign exchange. International finance. |
| url | http://eprints.um.edu.my/17132/1/2014_Tang_Triple_deficits.pdf |
| work_keys_str_mv | AT tangtc fiscaldeficittradedeficitandfinancialaccountdeficittripledeficitshypothesiswiththeusexperience |