Public Spending Management and Macroeconomic Interdependence

Giovanni Ganelli

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper studies the international macroeconomic effects of microeconomic measures, aimed at improving the efficiency of public spending management by increasing the price-elasticity of public consumption. In order to do this, we develop a New Open Economy Macroeconomics (NOEM) model in which the elastiity of substitution between differentiated goods in public consumption is different from the one in private consumption and the optimal mark-up is endogenous. This allows us to disentangle the international effects of structural reforms that improve the efficiency of spending in the public sector. We find that such policies can significantly affect the macroeconomic interdependence pattern that follows asymmetric fiscal shoocks. In welfare terms, we find that the countries with a larger government sector have an incentive to promote global "public competition policies".

Date: 2003
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tcd.ie/Economics/TEP/2003_papers/tepno9GG23.PDF (application/pdf)

Related works:
Journal Article: Public Spending Management and Macroeconomic Interdependence (2008)
Working Paper: Public Spending Management And Macroeconomic Interdependence (2004)
Working Paper: Public Spending Management and Macroeconomic Interdependence (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:20039

Access Statistics for this paper

More papers in Economic Papers from Trinity College Dublin, Economics Department Contact information at EDIRC.
Bibliographic data for series maintained by Colette Angelov ().