Littérature scientifique sur le sujet « Balance of payments, twin deficits, freights »

The aim of the article is to determine the degree, direction and strength of impact of the studied variables, i.e. the state budget balance and the current account balance as part of Poland's balance of payments in the years 2009-2018 against the background of selected European Union (EU) countries. The main research questions focus on determining the type of relationships connecting the studied deficits in the light of previous studies dedicated to the twin deficits hypothesis. The methodology used is based on integrated correlation analysis, linear regression and an analysis of the coefficient of variation. As a result of the study, a strong correlation was found between the cumulative values of the studied deficits, which confirms the existence of the twin deficits hypothesis in Poland in the examined period and means that the budget deficit affects the current account balance. A change in the cumulative balance of the budget by 1% leads to a change in the cumulative balance of the current account of the balance of payments by 0.89%. It can be presumed that the problem of budget deficits and the related debt crisis as well as balance of payments balances under the dichotomy of "surplus north" and "deficit south" in the next decade will be one of the most conflicting and disintegrative for the EU. Thus, the search for a path to budget (internal) balance and balance of payments (external) is one of the key challenges for maintaining cohesion and maintaining sustainable development both in Poland and the entire EU.

Higher and persistent level of fiscal deficit and current account deficit is the problem of the day for Indian economy. There exists an argument that higher fiscal deficit is the major factor behind worsening balance of payments position. However, there is no identical perception on the relationship between fiscal deficit and current account deficit both theoretically and empirically. Hence this article is a revisit to the existing debate to see whether fiscal deficit and current account deficit can be called as ‘twin deficits’ pertaining mainly to Indian economy. Using long-term annual data for the period 1980–1981 to 2012–2013 on Indian economy and using vector error correction method, this article seeks to prove that there exists long-term positive association between fiscal deficit and current account deficit, and hence can be called as ‘twins’. Using structural VAR method it has been proved here that fiscal deficit is in line with the pattern illustrated in Keynesian absorption theory and Mundell–Fleming model in regard to its impact on current account deficit. This article negates the relevance of Ricardian equivalence theory in Indian context.

The purpose of this study is to find the causal relationship among fiscal deficit, current account deficit and short term capital inflow and also to determine further the validity of the twin deficit hypothesis. The empirical model is estimated for the selected ten emerging market OECD economies during the period between 2000 and 2016 using annual data. The findings show that there is short term and long term bi-directional causality among the current account deficit, the fiscal deficit and the short term capital inflow except a uni-directional causal relationship from short term capital inflow to current account deficit in the short run. This implies that short term foreign capital inflows is a source of financing means for the current account deficit, its economic consequence may lead to balance of payments problems due to adverse effects on current account and authorities should design a fully fiscal discipline policy that should ensure drastic curtailment of fiscal deficit and at the time create conducive environment to attract foreign remittances and also foreign investment which would help to generate healthy external balances

The article examines the current state and causes of global imbalances’ sustainability – the phenomenon whereby some major systemic countries run large and persistent current account deficits, which are mirrored by large surpluses in a number of other countries. The widening of global imbalances during COVID 19 pandemic contrasts with their dynamics during previous global downturns, when the scale of imbalances narrowed. The article analyzes various explanations of global imbalances: intertemporal choice with a difference in the rates of return, demographic changes, global savings glut, dynamics of oil prices, exchange rate manipulations, twin deficits, demand for safe assets. The significance of each of the causes of global imbalances changes over time, and currently fiscal policy has been playing an increasing role to determine the movements of current account deficits. The global fiscal response to the pandemic, especially in advanced economies, has been unprecedented, which led to significant reduction in government savings. The scale and dynamics of global imbalances are largely determined by the state of the US balance of payments: it is a reflection of the ability to generate safe assets and to finance trade and budget deficits cheaply by using the dollar’s status as the dominant world currency. There are differences in theoretical approaches regarding the macroeconomic effects of global imbalances. But persistent current account deficits and surpluses lead to accumulation of stock imbalances – the difference between countries’ foreign assets and liabilities. The ongoing negative changes in the net international investment positions of many leading advanced economies indicate an increase in external indebtedness. This creates risks to both debtor and creditor countries and threatens the stability of the global financial system.

Globalization and international dynamics have always been crucial to understand modern economic development. Balance of payments dynamics, budget deficit, cur- rent account and international trade are the common subjects analyzed in order to deepen the issue from a macroeconomic perspective. The three chapters of the thesis cover exactly these topics. The first chapter provides new and robust estimates of the Italian current account between 1861 and 1914 overcoming the lacking data context showed by previous studies. In particular, focus is on the main entries of the invis- ible trade balance, that are: remittances, tourism, freights and capital interests. The second chapter shed lights on the relationship between budget deficit and current account deficit testing the so-called “twin deficit hypothesis” and exploiting part of the series of the first chapter together with other dataset. The econometric analysis is applied to both the short-run and the long-run. The third paper deepen the role of freights within the Italian international trade by looking to a new unit transport cost series presented for the first time in this kind of literature. The analysis is extended also to some specific determinants of trade such as bulkiness and distance.