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Twin Deficit

Twin Deficit. Xu Hu Texas A&M University. Co-movement of Trade Balance and Budget Balance. Exception : year 1991 - 1999. In 1990s, the government budget went from deficit to surplus. In 1990s, U.S. economy experienced a long and steady expansion.

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Twin Deficit

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  1. Twin Deficit XuHu Texas A&M University

  2. Co-movement of Trade Balance and Budget Balance

  3. Exception : year 1991 - 1999 • In 1990s, the government budget went from deficit to surplus. • In 1990s, U.S. economy experienced a long and steady expansion. • Why in this period the economy ran into more trade deficit? Especially starting from year 1997.

  4. Saving and Investment

  5. Consumption/ GDP ratio increased more rapidly during year 1997 -2000

  6. Information Technology Bubble (Dot-Com Bubble)

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