01785cas a2200253 a 4500 AALejournalIMF018592 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484364000 1018-5941 BD-DhAAL BD-DhAAL Furceri, Davide. Twin Deficits in Developing Economies / Davide Furceri, Aleksandra Zdzienicka. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (41 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Zdzienicka, Aleksandra. IMF Working Papers; Working Paper ; No. 2018/170 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/170/001.2018.issue-170-en.xml IMF e-Library