Fiscal Policy and the Current Account
International Monetary Fund
Authors registered in the RePEc Author Service: Paolo Mauro (),
S. M. Ali Abbas () and
Antonio Fatas ()
No 10/121, IMF Working Papers from International Monetary Fund
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 0.2â€“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.
Keywords: Economic models; Exchange rates; Oil exporting countries; Nonoil developing countries; Taxation; fiscal policy, external imbalances, current account, exchange rate, fiscal balance, government spending, budget balance (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (10) Track citations by RSS feed
Downloads: (external link)
Journal Article: Fiscal Policy and the Current Account (2011)
Working Paper: Fiscal Policy and the Current Account (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:imf:imfwpa:10/121
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Series data maintained by Jim Beardow ().