[PDF] Fiscal Policy And The Current Account eBook

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 32 pages
File Size : 14,40 MB
Release : 2010-05-01
Category : Business & Economics
ISBN : 1455200808

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This paper examines the relationship between fiscal policy and the current account, drawing on a larger country sample than in previous studies and using panel regressions, vector autoregressions, and an analysis of large fiscal and external adjustments. On average, a strengthening in the fiscal balance by 1 percentage point of GDP is associated with a current account improvement of 0.2–0.3 percentage point of GDP. This association is as strong in emerging and low-income countries as it is in advanced economies; and significantly higher when output is above potential.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 46 pages
File Size : 32,81 MB
Release : 1988-11-16
Category : Business & Economics
ISBN : 145194862X

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This paper analyzes, in a general equilibrium framework, how fiscal policy transmits its effects to the current account of the balance of payments. In discussing the role of fiscal policies in the Fund’s stabilization programs, the paper compares different approaches to explain the determination of the external balance. The model presented here is based on intertemporal optimization and focuses on the behavior of private and public agents. Some empirical evidence is also presented, based on data from ten Latin American countries. Finally, an appendix presents an integrated system of financial, external, and government accounts.

Author : Farrokh K. Langdana
Publisher : Springer Science & Business Media
Page : 299 pages
File Size : 27,88 MB
Release : 2013-03-09
Category : Business & Economics
ISBN : 1475736460

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This is an applications-oriented text that demystifies the linkages between monetary and fiscal policies and key macroeconomic variables such as income, unemployment, inflation and interest rates. Specially written "newspaper" articles simulate current macroeconomic news on asset-price bubbles, exchange rates, hyperinflation and more. Exercises and diagrams, and a global perspective – incorporating both developed and emerging economies - make this a broadly useful, real-world oriented text on a complex and shifting subject.

Author : Mr.Yehenew Endegnanew
Publisher : International Monetary Fund
Page : 27 pages
File Size : 12,81 MB
Release : 2012-02-01
Category : Business & Economics
ISBN : 1463937121

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This paper examines the empirical link between fiscal policy and the current account focusing on microstates defined as countries with a population of less than 2 million between 1970 and 2009. The paper employs panel regression and panel vector autoregression (VAR) on 155 countries of which 42 are microstates. Panel regression results show that a percentage point improvement in the fiscal balance improves the current account balance by 0.4 percentage points of GDP. The real effective exchange rate has no significant impact on the current account in microstates but the coefficient is significant in the global sample. Panel VAR results show that an increase in government consumption results in real exchange appreciation but the effect on the current account after an initial deterioration dies out quicker in microstates than in the global sample. The result implies that fiscal policy has little effect on the current account in microstates beyond its direct impact on imports. Overall, the results suggest that the weak relative price effects make the effect of fiscal adjustment on the current account much more difficult in microstates.

Author : Mr.Michael Kumhof
Publisher : International Monetary Fund
Page : 37 pages
File Size : 33,84 MB
Release : 2009-10-01
Category : Business & Economics
ISBN : 1451873840

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The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. We show that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they significantly raise the world real interest rate. Second, they cause a short run current account deterioration equal to around 50 percent of the fiscal deficit deterioration. Third, the longer run current account deterioration equals almost 75 percent for a large economy such as the United States, and almost 100 percent for a small open economy.

Author :
Publisher :
Page : 30 pages
File Size : 50,16 MB
Release : 2010
Category : Balance of payments
ISBN :

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This paper examines the relationship between fiscal policy and the current account, drawing on a larger country sample than in previous studies and using panel regressions, vector auto-regressions, and an analysis of large fiscal and external adjustments. On average, a strengthening in the fiscal balance by 1 percentage point of GDP is associated with a current account improvement of 0.2-0.3 percentage point of GDP. This association is as strong in emerging and low-income countries as it is in advanced economies; and significantly higher when output is above potential.

Author : Richard Hemming
Publisher : International Monetary Fund
Page : 62 pages
File Size : 22,8 MB
Release : 2002-12
Category : Business & Economics
ISBN :

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This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.

Author : Klaas Knot
Publisher : Edward Elgar Publishing
Page : 232 pages
File Size : 13,71 MB
Release : 1996-01-01
Category : Business & Economics
ISBN : 9781781959657

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This is an extensive study concerned with the potential effects of fiscal policy on financial markets in the EU. It takes into account the gradual liberalization of capital movements through Western Europe & the framework of the European Monetary System.

Author : Sebastian Edwards
Publisher : University of Chicago Press
Page : 782 pages
File Size : 25,61 MB
Release : 2002-11-15
Category : Business & Economics
ISBN : 9780226184944

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Economists and policymakers are still trying to understand the lessons recent financial crises in Asia and other emerging market countries hold for the future of the global financial system. In this timely and important volume, distinguished academics, officials in multilateral organizations, and public and private sector economists explore the causes of and effective policy responses to international currency crises. Topics covered include exchange rate regimes, contagion (transmission of currency crises across countries), the current account of the balance of payments, the role of private sector investors and of speculators, the reaction of the official sector (including the multilaterals), capital controls, bank supervision and weaknesses, and the roles of cronyism, corruption, and large players (including hedge funds). Ably balancing detailed case studies, cross-country comparisons, and theoretical concerns, this book will make a major contribution to ongoing efforts to understand and prevent international currency crises.