Price differentials in monetary unions: The role of fiscal shocks

• 成果类型: Article
• 署名作者: Canova, Fabio; Pappa, Evi
• 署名单位: Pompeu Fabra University; Autonomous University of Barcelona; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2007.02047.x
• 发表日期: 2007
• 页码: 713-737
• 关键词: government; POLICY

摘要

We study the effect of regional expenditure and revenue shocks on price differentials for 47 US states and 9 EU countries. We identify shocks using sign restrictions on the dynamics of expenditures, revenues, deficits and output and construct two estimates for structural price differentials dynamics, one for the average and one for each unit, which optimally weight information contained in the data for all units. On average, expansionary fiscal disturbances produce positive, while distortionary balance budget shocks produce negative price differential responses. The negative price differentials responses in some units is partially explained by spillovers and labour supply effects.