Talk:Twin deficits hypothesis

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I agree with Baronet double deficits is the same as twin deficits. —Preceding unsigned comment added by 156.26.98.140 (talk) 17:04, 9 April 2008 (UTC)

Merger proposal
Double deficit (economics) & Twin deficit theory are the same concept in economics. Baronnet (talk) 09:31, 7 February 2008 (UTC)
 * I think double deficit sounds better than twin deficit, because of the alliteration. Since you both say they're the same concept, why not choose the alternative that sounds better?  —Preceding unsigned comment added by 71.62.227.98 (talk) 16:21, 13 June 2008 (UTC)
 * I agree with the merger, however, this should be renamed "Twin deficit hypothesis"... it is far from a scientific theory, and it is often referred to as a hypothesis in formal writing. I'm going to be bold and go ahead and make the move and the merger. Gigs (talk) 00:50, 21 March 2009 (UTC)

Reorganisation of page
This page spends quite some time simply reaching the equation (S − I) + (T − G) = (X − M) which I don't believe is that controversial amongst different economic schools. The two basic macro equations Y = C + S + T and Y = C + I + G + X - M should really be discussed elsewhere; this page should mention it by reference. By the way, does anyone know where these equations are contained on Wikipedia?

I'd suggest starting with the observation that modern, open economies are characterised by 3 sectors (public / private / foreign) with flows between them (savings, tax etc) which on a net basis must sum to zero in any given period. It's worth pointing out that most Western governments run deficits over the long run (which is why most govts have net debt); this is the flip side of the private sector in most economies running surpluses over the long term (as it accumulates net wealth). We can go on to say that different economies at different times are characterised by different combinations of deficits or surpluses, giving examples and stats on countries such as Germany, Japan, US, UK, Switzerland.

The twin deficit hypothesis can thus be seen as just one of a number of configurations of the various balances, although it's obviously worth discussing some of the other theories including crowding out.

Any views? Happy to launch in. Anders Anderchr (talk) 23:04, 21 February 2010 (UTC)

proof/hypothesis
If this is a hypothesis then why does it have a proof? Should we rename the heading called 'proof'? RJFJR (talk) 17:33, 9 June 2010 (UTC)

NX or (X-M)
I changed the occurrences of X-M to NX for consistancey. RJFJR (talk) 17:34, 9 June 2010 (UTC)

Note
This definition is not correct. Twin deficit is an expression used to describe a situation in which a country has both a current account and a budget deficit. There is no correlation implied - there are many cases of countries where there are public deficits and current account surpluses (Japan, for example).

Note2
The twin deficit reason is based on a fiscal politics in a long run period, with open economy. It says that a public investment will make IS curve grow, rate of interest will grow as well production. In the long period with international rate of interest (just leave the point of inflation) the state will receive international capitals, flowing to the country because of higher rate of interest. This would make the change flot, towards an appreciation, making the commercial balance get even worse. So, because of NX negative, IS would go back IF there is not a monetary implementation. — Preceding unsigned comment added by 62.196.84.154 (talk) 16:31, 3 September 2011 (UTC)