Pregled bibliografske jedinice broj: 535261
THE TWIN DEFICITS HYPOTHESIS: EMPIRICAL EVIDENCE FROM CROATIA
THE TWIN DEFICITS HYPOTHESIS: EMPIRICAL EVIDENCE FROM CROATIA // Toward global governance / Krtalić, S. ; Božina, L. ; Gonan Božac, M. (ur.).
Pula: Sveučilište Jurja Dobrile u Puli, 2011. str. 245-273
CROSBI ID: 535261 Za ispravke kontaktirajte CROSBI podršku putem web obrasca
Naslov
THE TWIN DEFICITS HYPOTHESIS: EMPIRICAL EVIDENCE FROM CROATIA
Autori
Krtalić, Sandra ; Grdović Gnip Ana
Vrsta, podvrsta i kategorija rada
Poglavlja u knjigama, znanstveni
Knjiga
Toward global governance
Urednik/ci
Krtalić, S. ; Božina, L. ; Gonan Božac, M.
Izdavač
Sveučilište Jurja Dobrile u Puli
Grad
Pula
Godina
2011
Raspon stranica
245-273
ISBN
978-953-7498-46-7
Ključne riječi
fiscal deficit, current account deficit, twin deficit, Croatia, VAR model
Sažetak
Large and persistent budget deficits have occurred together with current account deficits in many (industrial) countries over the past two decades. This important issue known as the “twin deficits” has intrigued many researchers, economists and policy- makers. A large body of literature examines this crucial relationship for developed and developing economies, and yet the most pertinent conclusion from all this work remains the heterogeneity of its findings. Our empirical results concludes more in favour of the Ricardian equivalence because there is not a strong link between budget deficits and current account deficits in Croatia. This paper shows that there is no Granger causality amid the trade and budget deficit in Croatia in both directions. Moreover, changes in the budget deficit do not affect the trade deficit at all, while the influence of the latter on the budget deficit is around 5%. A stronger interest rate channel of monetary transmission would perhaps enhance the self- correction among the twins, but qualitative (and needed) structural reforms both in the government sector as well as in export would in the long run enhance the trade and budget balance and improve the overall economic framework in Croatia. We believe that a real solution to the problem of fiscal deficits and current account imbalances lies in a coherent package consisting of both fiscal and monetary policies. Appropriate policy measures focusing on productivity improvement, improvment of terms of trade, fiscal consolidation to raise public saving, exchange rate and monetary stance will complement the budget-cut policy. It seems prudent to reduce budget (and trade) deficit and remember Keynes’ famous quote “in the long run we all are dead!”
Izvorni jezik
Engleski
Znanstvena područja
Ekonomija
POVEZANOST RADA
Projekti:
145-0000000-2592 - Koliko države ili kakav sustav javnih financija treba Hrvatskoj u 21. stoljeću?
303-0000000-2592 - Koliko države ili kakav sustav javnih financija treba Hrvatskoj u 21. stoljeću? (Krtalić, Sandra, MZOS ) ( CroRIS)
Ustanove:
Sveučilište Jurja Dobrile u Puli