A reassessment of the twin deficits relationship
Holmes, M.J. (2010). A reassessment of the twin deficits relationship. Applied Economics Letters, 17(12), 1209-1212.
Permanent Research Commons link: https://hdl.handle.net/10289/4228
This article provides new evidence on the relationship between the United States budget and current account deficits. Using a testing procedure advocated by Bierens, both deficits are found to be stationary around a nonlinear deterministic trend and are co-trended insofar as they share a common nonlinear deterministic trend.
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