Spillovers from US Government Spending Shocks : Impact on External Positions /
This note analyzes the impact of preannounced government spending shocks in the United States on the real effective exchange rate and the trade balance. Using a vector autoregression framework that allows anticipated fiscal shocks to be identified using survey information, we find that preannounced...
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| Format: | Journal |
| Language: | English |
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Washington, D.C. :
International Monetary Fund,
2017.
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| Series: | Spillover Notes; Spillover Notes ;
No. 2017/001 |
| Online Access: | Full text available on IMF |
| Summary: | This note analyzes the impact of preannounced government spending shocks in the United States on the real effective exchange rate and the trade balance. Using a vector autoregression framework that allows anticipated fiscal shocks to be identified using survey information, we find that preannounced spending shocks lead to a sizable real effective dollar appreciation and a worsening of both the aggregate trade balance and bilateral trade balances in a panel of partner countries. The results are robust to controlling for country-specific variables like the macroeconomic and policy conditions in the recipient countries, are generalized across regions and might have decreased during the zero-interest-lower-bound regime. |
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| Item Description: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Physical Description: | 1 online resource (15 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 2522-7890 |
| Access: | Electronic access restricted to authorized BRAC University faculty, staff and students |