During recent years, large trade- and budget deficits have accumulated especially in advanced economies. This study examines if this coincidence actually reflects a causal relation. Economic theory and previously documented findings on causality between trade and government balances are...

The balanced growth and stochastic growth theory implies stable investment-output and consumption-output ratios. Our analysis supports cointegration between investment and output (IO-model) as well as consumption and output (CO-model) for single countries. Pooling the data we find cointegration...

The balanced growth and stochastic growth theory implies stable investment-output and consumption-output ratios. Our analysis supports cointegration between investment and output (IO-model) as well as consumption and output (CO-model) for single countries. Pooling the data we find cointegration...