01712cas a2200241 a 4500 AALejournalIMF007775 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451981094 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Government Purchases and Relative Prices in a Two-Country World. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (52 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The effects of government expenditures on interest rates, terms of trade, and real exchange rates are examined in a three-good (importables, exportables, nontradables), two-country, intertemporal, optimizing model. Temporary spending increases (on tradable or nontradable goods) may raise or lower the world return on internationally traded bonds and may improve or worsen the current account of the country undergoing the fiscal expansion. The results are shown to differ substantially from those obtained in models employing a higher degree of commodity aggregation. The determinants of the comovement between the terms of trade and the real exchange rate are also examined. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/028 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/028/001.1989.issue-028-en.xml IMF e-Library