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The International Spillover of Fiscal and Technology Shocks before the Crisis: The case of the UK and Italy

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  • Saeidinezhad, Elham

Abstract

In this paper, we attempt to shed new light on the dynamic impacts of gov- ernment spending and technology shocks on the real exchange rate for the Euro area. The main idea under this identification scheme is to let the data speak about the behavior of the interested variables. Moreover, this paper investigates the impacts of fiscal policy and technology shock jointly in contrast to most of the literature which just focuses on one shock only. Our investigation suggests that the real exchange rate appreciates (falls) following an expansionary fiscal shock. It appreciates in response to a positive technology shock as well however after an on impact depreciation (increase) which lasts for 8 quarters.

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  • Saeidinezhad, Elham, 2014. "The International Spillover of Fiscal and Technology Shocks before the Crisis: The case of the UK and Italy," MPRA Paper 98556, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98556
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    More about this item

    Keywords

    Fiscal Policy; Technology Shock; International Spillover; Financial Crisis; VAR;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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