IDEAS home Printed from https://ideas.repec.org/p/ota/busdis/10252-4213.html
   My bibliography  Save this paper

Government Expenditure and the Balance of Payments : Budget Deficit, Financial Integration, and Economic Diplomacy

Author

Listed:
  • Shibuya, Hiroshi

Abstract

This paper studies the international and intertemporal implications of increased government expenditure. First, it reviews the conventional proposition that increased government expenditure raises interest rates, crowds out investment, and reduces growth. Then, it shows that this proposition does not necessarily hold in an open economy with integrated international capital markets. This creates a possibility of the strategic intertemporal macroeconomic policy, which minimizes the adverse effects of increased government expenditure on macroeconomic performance. In particular, a country can use economic diplomacy in such a way that government expenditure does not affect its interest rate and potential national income. It offers a new interpretation of the U.S. macroeconomic policy and economic diplomacy toward Japan in the 1980s and 1990s.

Suggested Citation

  • Shibuya, Hiroshi, 1996. "Government Expenditure and the Balance of Payments : Budget Deficit, Financial Integration, and Economic Diplomacy," ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) 10252/4213, Otaru University of Commerce.
  • Handle: RePEc:ota:busdis:10252/4213
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ota:busdis:10252/4213. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Miura, Chiho (email available below). General contact details of provider: https://edirc.repec.org/data/deotajp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.