THE

ECONOMIST’S
SAVINGS , INVESTMENT
SPENDING
 GROUP MEMBERS

• FAHIM ZUBAER - 2015-3-10-166

• MD RASHIC JOHAYER – 2017-1-10-207
• AINUL KHADEM – 2018-1-10-054
• HOSNEY ARA SIDDIKA - 2018-1-30-033
• ARSHED UR RASHID - 2018-1-10-194
Understanding Twin Deficit
Twin Deficits is a macroeconomic phenomenon When a Nation’s Govt. has both
Trade Deficit and Budget Deficit

Trade Deficit
• Higher Government
• Tax Cuts • Increased External Deficit
• Higher Govt. • Higher Imports and
Borrowings
Dependency on foreign
Spending • Lower Savings inflows

Budget Deficit Twin Deficit

IN AN OPEN
ECONOMY

Sp+ Sg+ NCI = I

Sp= Private Savings
Sp+(T-G)+(IM-EX)= I Sg= Govt. Savings
NCI= Net Capital Inflow
T= Tax
(Sp-I)+(IM-EX)= (G-T) G= Government Spending
Assuming, IM= Import
Private Savings Sp= Investment I EX= Export

(IM-EX) = (G-T)