Title: THE TWIN DEFICITS HYPOTHESIS: AN EXAMINATION OF THE RELATIONSHIP BETWEEN TRADE AND FISCAL DEFICITS
Author:
Dimitra Mitsi
Abstract:
The Twin Deficits Hypothesis is a widely discussed economic theory that explores the relationship between a country’s trade deficit and its fiscal deficit. This paper aims to provide a comprehensive analysis of the Twin Deficits phenomenon, discussing its origins, theoretical underpinnings, empirical evidence, and policy implications. By examining the interplay between trade and fiscal deficits, this study seeks to shed light on the complexities of the global economic landscape and inform policymakers about potential strategies to maintain sustainable economic growth.
Keywords: Causality, fiscal deficit, economic policy, trade deficit.
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