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Trade spill-overs of fiscal policy in the European Union: a panel analysis

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  • Roel Beetsma
  • Massimo Giuliodori
  • Franc Klaassen

Abstract

"We explore international spill-overs from fiscal policy shocks via trade in Europe. To assess and quantify the channels through which a fiscal expansion stimulates domestic activity, foreign exports, and foreign output, we estimate a dynamic empirical model of government spending, net taxes, and output, and combine its estimates with a panel model of trade linkages across European countries. The baseline estimates of both models are quite robust and statistically significant. Our results indicate that trade spill-overs of fiscal shocks should be taken into account when assessing the character and intensity of economic integration in the European Union." Copyright CEPR, CES, MSH, 2006.

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Bibliographic Info

Article provided by CEPR & CES & MSH in its journal Economic Policy.

Volume (Year): 21 (2006)
Issue (Month): 48 (October)
Pages: 639-687

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Handle: RePEc:bla:ecpoli:v:21:y:2006:i:48:p:639-687

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