Federal and Trade Deficits

Federal Trade Commission

1 Settlement in this matter precludes the possibility of a litigated record. Thus, the Commission’s understanding of the facts as set forth in this Analysis is based on the record developed during staff’s investigation. The Commission has decided to include discussion of the relevant parts of the investigatory record to provide the best guidance it can on the scope of the state action defense a...

Equilibrium Institutions: The Federal-Proportional Trade Off

Durable democracies display a huge variety of combinations of basic institutional formulas. A quantitative logical model shows that while there are multiple equilibrium sets of institutions, each involves some trade-off between the size of the country, the territorial structure of government and the electoral system. Specifically, the larger the country, the more important is federalism in comp...

Twin Deficits An empirical analysis on the relationship between budget deficits and trade deficits in Argentina

The majority of existing literature on the twin deficits hypothesis focuses on its effects in economies already well developed. The theory suggests that there is a causal relationship between the budget deficit and trade deficit of a nation, a claim often debated in the economic community. This paper attempts to supplement existing literature by examining the causal relationship between budget ...

Red Signals: Trade Deficits and the Current Account

This paper proposes a method to asses the potential problems of sustainability of a country’s sovereign debt. We claim that the relevant variables used for this analysis are typically subject to changes which are associated with changes in macroeconomics policies. We propose a procedure for identifying periods under which the trade deficit and the current account accumulate at a nonstationary r...

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