Imports and the income-expenditure model: implications for fiscal policy and recession fighting
AbstractThis paper modifies the textbook income-expenditure model to properly account for imports. This modification causes government spending to have an even larger relative impact compared to tax cuts than conventionally thought. It also shows that increased government spending can have a smaller impact on the trade deficit than tax cuts despite spending having a larger multiplier effect on income. Consequently, spending may be doubly advantaged over tax cuts as a means of reflating economic activity. Last, the paper shows that consumption tax cuts can be an antistimulus that reduces aggregate demand and output.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.
Volume (Year): 32 (2009)
Issue (Month): 2 (December)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348
fiscal policy; imports; income-expenditure model; multiplier;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kazimierz Łaski & Jerzy Osiatyński & Jolanta Zięba, 2012. "Fiscal multipliers and factors of growth in Poland and the Czech Republic in 2009," National Bank of Poland Working Papers, National Bank of Poland, Economic Institute 117, National Bank of Poland, Economic Institute.
- Kazimierz Laski & Jerzy Osiatynski & Jolanta Zieba, 2010. "The Government Expenditure Multiplier and its Estimates for Poland in 2006-2009," wiiw Working Papers, The Vienna Institute for International Economic Studies, wiiw 63, The Vienna Institute for International Economic Studies, wiiw.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen).
If references are entirely missing, you can add them using this form.