Excess Savings and Twin Deficits
Download or Read eBook Excess Savings and Twin Deficits PDF written by Rishabh Aggarwal and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle.
Author | : Rishabh Aggarwal |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
ISBN-10 | : OCLC:1334326144 |
ISBN-13 | : |
Rating | : 4/5 (44 Downloads) |
Book Synopsis Excess Savings and Twin Deficits by : Rishabh Aggarwal
Book excerpt: We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a larger-than-average fiscal deficit experiences both a large increase in private savings ("excess savings") and a small but persistent current account deficit (a slow-motion "twin deficit"). These patterns are consistent with the evolution of the world's balance of payments since the beginning of the Covid pandemic.