The importance of composition of fiscal policy: evidence from different exchange rate regimes

• 成果类型: Article
• 署名作者: Lane, PR; Perotti, R
• 署名单位: Trinity College Dublin; European University Institute
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(01)00194-3
• 发表日期: 2003
• 页码: 2253-2279
• 关键词: Fiscal policy; Transmission mechanisms; open economy

摘要

We study the macroeconomic effects of fiscal policies in an open economy. We emphasize two transmission mechanisms: the cost channel, by which wage government spending and labor taxes raise the real wage firms must pay, and the exchange rate channel, by which the nominal exchange rate shifts induced by fiscal policy have real effects if (some) prices and wages are sticky. The latter channel implies that changes in wage government spending or in labor taxation should have different effects under flexible than under fixed exchange rates. In a 1964-93 panel of OECD countries we find significant evidence for both channels. Moreover, we find that the real product wage and profitability are more responsive than quantities (employment and output) to fiscal policy innovations. (C) 2002 Elsevier B.V. All rights reserved.