Franklin

Fiscal Deficits and Current Account Deficits [electronic resource] Kumhof, Michael.

Author/Creator:
Kumhof, Michael.
Publication:
Washington, D.C. : International Monetary Fund, 2009.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 09/237.
IMF Working Papers; Working Paper No. 09/237
Format/Description:
Government document
Book
1 online resource (35 p.)
Local subjects:
Account deficits.
Aggregate demand.
Balance of payments.
Budget constraint.
Budget deficits.
Central bank.
Current account.
Current account balance.
Current account balances.
Current account deficit.
Current account deficits.
Current accounts.
Debt.
Debt dynamics.
Debt Management.
Debt ratio.
Debt stock.
Debt stocks.
Domestic currency.
Economic models.
Expansionary fiscal.
Fiscal accounts.
Fiscal consolidation.
Fiscal crisis.
Fiscal deficit.
Fiscal deficits.
Fiscal instrument.
Fiscal issues.
Fiscal model.
Fiscal multipliers.
Fiscal outlook.
Fiscal policies.
Fiscal Policy.
Fiscal policy on consumption.
Fiscal shocks.
Fiscal stimulus.
Fiscal sustainability.
Foreign borrowing.
General.
Government budget.
Government budget constraint.
Government debt.
Government deficit.
Government deficits.
Government revenue.
Government spending.
Gross domestic product.
Increase in consumption.
Interest expenditure.
International debt.
International lending.
International Policy Coordination and Transmission.
National debt.
Open Economy Macroeconomics.
Primary deficit.
Public debt.
Public Expenditures, Investment, and Finance.
Reserve bank.
Savings.
Stock of debt.
Tax base.
Tax changes.
Tax cut.
Tax cuts.
Tax income.
Tax payments.
Tax policy.
Tax revenues.
Taxation.
United States.
Summary:
The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. We show that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they significantly raise the world real interest rate. Second, they cause a short run current account deterioration equal to around 50 percent of the fiscal deficit deterioration. Third, the longer run current account deterioration equals almost 75 percent for a large economy such as the United States, and almost 100 percent for a small open economy.
Notes:
Description based on print version record.
Contributor:
Kumhof, Michael.
Laxton, Douglas.
Other format:
Print Version:
ISBN:
1451873840:
9781451873849
ISSN:
1018-5941
Publisher Number:
10.5089/9781451873849.001
Access Restriction:
Restricted for use by site license.
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