Article ID Journal Published Year Pages File Type
963171 Journal of International Economics 2011 12 Pages PDF
Abstract
► We analyze fiscal policy transmission in the neoclassical open-economy model. ► We consider the role of habit formation and endogenous terms of trade adjustment. ► Empirically, government spending tends to lower investment and the current account. ► With habits and endogenous terms of trade the model can account for this finding.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Habit formation and fiscal transmission in open economies
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