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

  • Roel Beetsma
  • Massimo Giuliodori
  • Franc Klaassen

type="main" xml:lang="en"> 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. — Roel Beetsma, Massimo Giuliodori and Franc Klaassen

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File URL: http://hdl.handle.net/10.1111/j.1468-0327.2006.00168.x
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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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