Twin deficits revisited: A role for fiscal institutions?

Document type :

Article dans une revue scientifique

DOI :

10.1016/j.jimonfin.2021.102506

Title :

Twin deficits revisited: A role for fiscal institutions?

Author(s) :

Afonso, António [Auteur]
Huart, Florence [Auteur]

Lille économie management - UMR 9221 [LEM]
Tovar Jalles, João [Auteur]
Stanek, Piotr [Auteur]

Journal title :

Journal of International Money and Finance

Pages :

102506

Publisher :

Elsevier

Publication date :

2022-03

ISSN :

0261-5606

English keyword(s) :

Current account
Budget balance
Fiscal rules
Panel data
system GMM

HAL domain(s) :

Sciences de l'Homme et Société/Economies et finances

English abstract : [en]

We revisit the twin-deficits relationship for a sample of 65 countries with fiscal rules over the period 1985–2015, using a panel data estimation methods. Our analysis accounts for the role of various types of fiscal rules ...
Show more >We revisit the twin-deficits relationship for a sample of 65 countries with fiscal rules over the period 1985–2015, using a panel data estimation methods. Our analysis accounts for the role of various types of fiscal rules and institutions: expenditure rules, revenue rules, budget balance rules, debt rules, fiscal councils, and supporting procedures. We find that the twin-deficits hypothesis is confirmed. The impact of the budget balance on the current account balance is increased when fiscal rules are considered, except with revenue rules and debt rules. Well-designed fiscal rules, fiscal councils and features that reinforce compliance with rules improve the current account balance. Our findings highlight the role of fiscal factors in explaining sustained global current account imbalances. They also contribute to the ongoing discussion about the improvement of macroeconomic and budgetary surveillance in the European context.Show less >

Language :

Anglais

Peer reviewed article :

Oui

Audience :

Internationale

Popular science :

Non

Collections :

Lille Économie Management (LEM) - UMR 9221

Source :

Harvested from HAL

Files

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