Fiscal Policy and the Current Account

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 bal...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2010
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Fiscal Policy and the Current Account 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2010 
300 |a 30 pages 
651 4 |a United States 
653 |a Fiscal stance 
653 |a Wealth 
653 |a Economics 
653 |a Short-term Capital Movements 
653 |a Current account 
653 |a Saving 
653 |a Government consumption 
653 |a Current Account Adjustment 
653 |a Fiscal Policy 
653 |a Balance of payments 
653 |a Exports and Imports 
653 |a Fiscal policy 
653 |a International economics 
653 |a Current account balance 
653 |a Consumption 
653 |a Macroeconomics 
653 |a Macroeconomics: Consumption 
653 |a Public Finance 
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520 |a 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