Does fiscal policy matter for the trade account?
Subtitle: a panel cointegration study
By: prepared by Katja Funke and Christiane Nickel.
Contributors: Nickel, Christiane.; International Monetary Fund. Middle East and Central Asia Dept.
Series: IMF working paper -- WP/06/147
Publisher: International Monetary Fund, Middle East and Central Asia Dept.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 25
Subjects: Fiscal policy -- Econometric models.; Expenditures, Public -- Econometric models.; Imports -- Econometric models.; Balance of trade -- Econometric models.; Demand (Economic theory) -- Econometric models.
Description: This paper analyzes 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 G-7 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.
Notes: "June 2006."

Includes bibliographical references (p. 23-25).

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