Mr. Keynes Meets the Classics: Government Spending and the Real Exchange Rate

• 成果类型: Article
• 署名作者: Born, Benjamin; D'Ascanio, Francesco; Mueller, Gernot J.; Pfeifer, Johannes
• 署名单位: Frankfurt School Finance & Management; Leibniz Association; Ifo Institut; Leibniz Association; Ifo Institut; Accenture; Eberhard Karls University of Tubingen; Bundeswehr University Munich
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/727707
• 发表日期: 2024
• 页码: 1642-1683
• 关键词: Financial innovation; RISK; FinTech

摘要

In economies with fixed exchange rates, the adjustment to government-spending shocks is asymmetric. Expansionary shocks are absorbed by the real exchange rate, contractionary shocks by output. This result emerges in a small open-economy model with downward nominal wage rigidity and is supported by new empirical evidence based on panel data from different exchange-rate regimes. The exchange-rate regime, economic slack, inflation, and how spending is financed all matter for the fiscal transmission mechanism in the way predicted by the model. Estimates that fail to distinguish between the effects of positive and negative shocks are subject to a depreciation bias.