Using two measures of the fiscal position, the cyclically adjusted primary budget balance (CAPB) and the total budget …-varying coefficients of the current account balance responses to changes in the CAPB and in the government balance and we identify the … determinants of these responses. The CAPB and the government balance, in addition to being determinants of the current account …

deficit of 0.318 pp of GDP, which supports the Twin Deficits Hypothesis. On the other hand, dynamic panel estimates partially … two deficits is asymmetric and the negative impact of the recent Eurozone banking and sovereign debt crisis on the current … positive impact of the budget balance on the current account balance is higher in the cases of non-Eurozone countries, high …