Series: IMF Working Papers
Author(s): Jun Kim
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 February 2007
Keywords: exchange rate elasticity of trade balance, fiscal policy, consumption smoothing, exchange rate, government spending, real exchange rate
By using a simple intertemporal model of the current account, I show that the exchange rate elasticity of the trade balance would ceteris paribus be smaller for countries with higher government spending ratios (rel...