On the Effects of Government Spending Shocks in Developing Countries
AbstractTime series analysis of annual data for a sample of developing countries shows the allocation of government spending shocks, both positive and negative, between price inflation and output growth. Cross-country regressions evaluate determinants of the difference in the real effects of government spending shocks. If the real effects decrease, capacity constraints are more binding and if they increase, the elasticity of aggregate demand is larger with respect to the change in government spending. Cross-country regressions also evaluate the implications of government spending shocks on the difference in trend price inflation and output growth. The variability of government spending shocks decreases trend real output growth and increases trend price inflation across countries.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Oxford Development Studies.
Volume (Year): 33 (2005)
Issue (Month): 2 ()
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- Magda E. Kandil & Hanan Morsy, 2010.
"Fiscal Stimulus and Credibility in Emerging Countries,"
IMF Working Papers
10/123, International Monetary Fund.
- Magda Kandil & Hanan Morsy, 2014. "Fiscal Stimulus and Credibility in Emerging Countries," Eastern Economic Journal, Palgrave Macmillan, vol. 40(3), pages 420-439, June.
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