A revisit on the role of macro imbalances in the US recession of 2007-2009

JEL codes: 
E30, E59, E62
Keywords: 
Macro imbalances, US recession, Nonlinear Granger causality
Author/s: 
Aviral Tiwari
Version Date: 
Jun 2011
Abstract: 

The present study is an attempt to revisit the evidences of a very recent study of Paul (2010) on the role of macro imbalances in the US recession of 2007-09. Contrary to Paul (2010) who finds that great recession was due to, particularly, twin deficits, I found central cause of the problem was prolonged fiscal deficit.

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