search query: @indexterm fiscal policy / total: 505
reference: 176 / 505
Author: | Lane, P. R. Perotti, R. |
Title: | The trade balance and fiscal policy in the OECD |
Journal: | European Economic Review
1998 : MAY, VOL. 42:3-5, p. 887-895 |
Index terms: | FISCAL POLICY OECD EXCHANGE RATES VISIBLE BALANCE |
Language: | eng |
Abstract: | The short-run impact of movements of different components of fiscal policy on the trade balance is explored. The trade balance refers to the one with exports and imports for a panel of OECD countries over 1960-1995. It is found that the composition of a shift in fiscal policy and the exchange rate regime matter for its transmission to the external account. The strongest result is that an expansion in wage government consumption causes a contraction in exports and a deterioration of the trade balance, especially under flexible exchange rates. In the paper, it is discussed the implications of the results for fiscal and current-account adjustment. |
SCIMA