Twin deficits
MacroDefinition
Concurrent fiscal deficit + current account deficit. Common in late-cycle expansions where government spending and consumer demand both run hot. The US has been in twin-deficit territory since the early 1980s.
Theoretically should pressure the dollar (more US debt + more imports requires foreign capital). Reality: dollar dominance has overridden the textbook implication for decades.
Theoretically should pressure the dollar (more US debt + more imports requires foreign capital). Reality: dollar dominance has overridden the textbook implication for decades.