Диссертацияларининг асосий илмий натижаларини чоп этиш тавсия этилган илмий нашрлар ва Россия

Diagram 1. Fiscal balance and Current Account balance (% of GDP)
Source: 
Authors’ calculations based on the IMF data.
As it can be seen from the diagram, Uzbekistan's 
current account had been in deficit for the last 3 
years - 2018, 2019, and 2020, with the highest figure 
being -7.1% of GDP to 2018. This was mainly due to 
the liberalization of trade and exchange rate regimes 
and, as a consequence, the growth of investment. 
The overall fiscal balance for 2015-2020 remained in 
deficit and was -4.5% of GDP in 2020. One of the main 
reasons for this was the allocation of huge loans for 
the implementation of large-scale reforms to create 
conditions for strong private sector-led growth, job 
creation, and poverty alleviation.
To see the relationship between Uzbekistan's current 
account balance and the budget balance the scatter plot 
was provided (Diagram 2).
Diagram 2. The relationship between current 
account and fiscal balance.
Source:
 Authors’ calculations based on the IMF data

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24
Iqtisodiyot: 
tahlillar va prognozlar
The twin deficit hypothesis had been studied 
empirically by many economists. For instance, a study 
by Tang and Lau (2011) found that a 1% increase in 
budget deficit causes 0.43% increase in current account 
deficit in the US from 1973 to 2008 [3].
S. M. Ali Abbas et al. (2011) began their empirical 
analysis with panel regressions on 88 non-oil exporting 
economies spanning the period 1970-2007. The findings 
suggest that, on average, a strengthening in the cyclically-
adjusted primary balance-to-potential GDP ratio (CAPB) 
of 1 percentage point is associated with an improvement 
in the current account-to-GDP ratio of about 0.3 [4].
IMF paper (2018) provides evidence on the existence 
and magnitude of the “twin deficits” in developing 
economies. According to the working paper, using 
unanticipated government spending shocks for an 
unbalanced panel of 114 developing economies from 
1990 to 2015, the experts found that a 1% of GDP 
unanticipated improvement in the government budget 
balance improves, on average, the current account 
balance by 0.8 percentage point of GDP [5].
The traditional Keynesian approach postulates 
that current account deficit has a positive relationship 
with budget deficit. This means that an increase in 
budget deficit will lead to a current account deficit and 
a budget surplus will have a positive impact on the 
current account deficit. The increase in budget deficit 
will lead to domestic absorption and, thus, increase 
domestic income, which will lead to an increase in 
imports and widen the current account deficit [6]. This 
can be described by the following equations: