Twin Surpluses or Twin Deficits? The Current-Account and Investment Identity in 24 Oil Exporters Versus India and 137 Other Economies, 2000-2023
Year: 2026
Type: preprint
Abstract: National accounts require that the current-account balance equal saving minus investment, up to measurement. Using World Bank WDI for 172 economies, I verify that the correlation of the current account with saving minus gross fixed capital formation is 0.807, with a mean residual of -1.82 points of GDP. Among 23 oil exporters (mean fuel-export share at least 40 percent) over 2000-2023, the median current account is +3.93% of GDP and the median saving-investment gap is +8.05 points, against -3.32% and -2.19 for 137 non-oil economies. An oil dummy raises the mean current account by 12.7 points (HC1 standard error 4.5) after controlling for investment. Six oil exporters combine a current account above 5% with investment below the non-oil median of 22.9%: Iraq, Kuwait, Libya, Norway, Russia and Saudi Arabia. India runs the opposite pattern: mean current account -1.27% of GDP with investment of 30.9%, a high-investment external deficit rather than a twin surplus. Within-economy slopes of the current account on investment are negative (median -0.46), including India (-0.13).
Author: Aguru, Manoj Kumar
Institution: Chaitanya
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7225455135