Does fiscal policy matter for the trade account? A panel cointegration study

Arbeitspapier

This paper analyses 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 G7 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 620

Classification and Topics

• Classification: Wirtschaft ; Current Account Adjustment; Short-term Capital Movements ; Fiscal Policy ; Open Economy Macroeconomics
• Subject: Fiscal Policy ; Panel Cointegration ; trade account ; trade elasticities ; Finanzpolitik ; Leistungsbilanz ; G7-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Funke, Katja ; Nickel, Christiane
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/153054
• Last update: 10.03.2025, 11:44 AM CET