Twin Deficits and External Imbalances: A Bibliometric Analysis of Global Research with Insights from India and G7 Economies

Abstract

This study examines global research on the twin deficit hypothesis and external imbalances, with a focus on India and G7 economies, using bibliometric analysis of 110 peer-reviewed articles published between 2010 and 2025 from Scopus. A Three-Stage analysis of intellectual structures, thematic clusters, and methodological approaches shows that fiscal deficits, current account deficits, and external imbalances remain central research themes. Econometric methods such as ARDL, VAR, and cointegration dominate empirical testing. In India, fiscal policy exhibits a strong and asymmetric relationship with current account outcomes, influenced by oil price shocks, capital flows, and state-level fiscal dynamics. In G7 economies, a more complex triplet deficit framework emerges, integrating fiscal, trade, and savings-investment gaps. These findings highlight that external shocks, structural competitiveness, and policy design significantly shape the persistence of twin deficits. By mapping knowledge clusters and gaps, the study offers insights for policymakers to enhance fiscal sustainability and external stability in a globally integrated economy. This study emphasizes how fiscal, trade, and external imbalances are interconnected globally, with India showing asymmetric fiscal–current account dynamics and G7 economies following a more complex triplet deficit framework. Policymakers can leverage these insights to design targeted strategies that promote fiscal sustainability, external stability, and resilience to global shocks, providing lessons for emerging and developed economies alike.