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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 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
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Review of Theoretical and Empirical Studies; 1. Accounting for Largest Changes in Current Account and Fiscal Balance; III. Large Changes in the Current Account and Fiscal Balances; IV. Econometric Analysis; 2. Fiscal Policy and the Current Account, Panel Regressions; 1. Current Account Response to Changes in the Log of Real Government Consumption; V. Conclusion; 1. Synthetic Summary of the Empirical Literature; 2. Fiscal Policy, the Current Account and the Real Exchange Rate: A Review of Theory; References; Footnotes
Literary Form
non fiction
"May 2010."
Physical Description
1 online resource (51 p.)
Specific Material Designation
Form Of Item

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