The Phenomenon of Twin Deficits in Poland in 2009–2018
Abstract
The purpose of this article is to determine the degree, direction and
strength of the impact of the studied variables, i.e. the state budget
balance and the current account balance as part of Poland’s balance
of payments in the years 2009–2018 based on the data of the Statistics
Poland. The main research questions focus on determining the type
of relationships connecting the studied deficits and the degree, direction and type of interaction in light of previous studies dedicated to the
hypothesis of twin deficits. The methodology used is based on integrated correlation analysis, linear regression and an analysis of the coefficient of variation. As a result of the study, a strong correlation was
found between the cumulative values of the examined deficits, confirming the existence of the twin deficit hypothesis in Poland in the
examined period; this means that the budget deficit affects the current
account balance of payments. The main balance stabilizing the negative
balance of primary incomes, in which the income of non-residents from
foreign direct investment is the dominant position, was the balance
of extremely dynamically developing service exports.