Utilizad este identificador para citar o enlazar este documento: http://hdl.handle.net/2072/204096

Fiscal foresight, forecast revisions and the effects of government spending in the open economy
Gambetti, Luca
Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica; Institut d'Anàlisi Econòmica
This paper investigates the effects of government spending on the real exchange rate and the trade balance in the US using a new VAR identification procedure based on spending forecast revisions. I find that the real exchange rate appreciates and the trade balance deteriorates after a government spending shock, although the effects are quantitatively small. The findings broadly match the theoretical predictions of the standard Mundell-Fleming model and differ substantially from those existing in literature. Differences are attributable to the fact that, because of fiscal foresight, the government spending is non-fundamental for the variables typically used in open economy VARs. Here, on the contrary, the estimated shock is fundamental.
26-11-2012
Política fiscal
Pronòstic de l'economia
Despeses públiques
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Documento de trabajo
Working papers; 907.12
         

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