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Does Fiscal Policy Matter for the Trade Account? A Panel Cointegration Study

This paper analyzes the empirical relationship between fiscal policy and the trade account. Research prior to this paper did not consider that the components of private and public demand in the import demand equation exhibit different elasticities. Using pooled mean group estimation for annual panel...

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Bibliographic Details
Main Author: Nickel, Christiane
Other Authors: Funke, Katja
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2006
Series:IMF Working Papers
Subjects:
Wealth
Economics
Private Investment
Investment
Private Consumption
Public Finance & Taxation
Saving
Trade: General
Exports And Imports
Intangible Capital
International Economics
National Government Expenditures And Related Policies: General
Expenditure
Saving And Investment
Exports
Investments: General
Consumption
Expenditures, Public
Macroeconomics
Macroeconomics: Consumption
Capacity
Capital
Public Finance
Imports
Japan
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper analyzes the empirical relationship between fiscal policy and the trade account. Research prior to this paper did not consider that the components of private and public demand in the import demand equation exhibit different elasticities. Using pooled mean group estimation for annual panel data of the G-7 countries for the years 1970 through 2002, we provide empirical evidence that the composition of overall demand-i.e., the distribution among public demand, private demand, and export demand-has an impact on the magnitude of the trade account deficit
Physical Description:27 pages
ISBN:9781451864076

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