twin deficits

Separated at Birth? The Twin Budget and Trade Balances

20 September 2011

The International Monetary Fund, IMF has one full chapter devoted to the subject of “twin deficits” in their latest issue of World Economic Outlook. The subject of “twin deficits” is full of complications and can invoke the deepest emotions from economists. Naively, the argument goes as follows: The “three financial balances” identity can be written as NAFA [...]

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Chart: Fiscal Transfers

19 August 2011

Wynne Godley used to say that fiscal transfers happen without anyone really noticing. From The Economist, fiscal transfers in the US (finally gets noticed!):

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