Fiscal Policy and the Exchange Rate-Current Account Nexus /

By using a simple intertemporal model of the current account, I show that the exchange rate elasticity of the trade balance would ceteris paribus be smaller for countries with higher government spending ratios (relative to GDP) and with more limited scope for private consumption smoothing. This find...

Ausführliche Beschreibung

Bibliographische Detailangaben
1. Verfasser: Kim, Jun
Format: Zeitschrift
Sprache:English
Veröffentlicht: Washington, D.C. : International Monetary Fund, 2007.
Schriftenreihe:IMF Working Papers; Working Paper ; No. 2007/027
Online Zugang:Full text available on IMF
Beschreibung
Zusammenfassung:By using a simple intertemporal model of the current account, I show that the exchange rate elasticity of the trade balance would ceteris paribus be smaller for countries with higher government spending ratios (relative to GDP) and with more limited scope for private consumption smoothing. This finding may have important implications for the design of adjustment programs and for resolving current global imbalances. It could also help explain and reconcile mixed empirical findings on trade elasticities.
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Beschreibung:1 online resource (13 pages)
Format:Mode of access: Internet
ISSN:1018-5941
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