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OFFICIAL PORTAL OF THE
MINISTRY OF INVESTMENT, TRADE AND INDUSTRY
Home- About MITI
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Twin Deficit Hypothesis
- Home
- Twin Deficit Hypothesis
The twin deposit hypothesis makes a connection between current account deficit and fiscal deficit.
The theory suggests that tax cuts can increase fiscal deficit and results in increased consumption, which will lower the national savings rate. In turn, a nation has to borrow more money from other countries.
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