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An introduction to the international implications of U.S. fiscal policy

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  • Owen F. Humpage

Abstract

A challenge to the commonly held belief that aggregate U.S. fiscal policy measures, especially the federal budget deficit, bear a simple and direct causal relationship with U.S. interest rates, exchange rates, and the trade balance, concluding that fiscal policies can--but need not--cause trade deficits.

Suggested Citation

  • Owen F. Humpage, 1992. "An introduction to the international implications of U.S. fiscal policy," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 27-39.
  • Handle: RePEc:fip:fedcer:y:1992:i:qiii:p:27-39:n:v.28no.3
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    References listed on IDEAS

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    1. Evans, Paul, 1985. "Do Large Deficits Produce High Interest Rates?," American Economic Review, American Economic Association, vol. 75(1), pages 68-87, March.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
    3. Enders, Walter & Lee, Bong-Soo, 1990. "Current Account and Budget Deficits: Twins or Distant Cousins?," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 373-381, August.
    4. Evan F. Koenig, 1989. "Recent trade and exchange rate movements: possible explanations," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Sep, pages 13-28.
    5. Adrian W. Throop, 1989. "Fiscal policy, the dollar, and international trade: a synthesis of two views," Economic Review, Federal Reserve Bank of San Francisco, issue Sum, pages 27-44.
    6. Michael M. Hutchison & Adrian W. Throop, 1985. "U.S. budget deficits and the real value of the dollar," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 26-43.
    7. Hoelscher, Gregory, 1986. "New Evidence on Deficits and Interest Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 1-17, February.
    8. Rosenswieg, Jeffrey A & Tallman, Ellis W, 1993. "Fiscal Policy and Trade Adjustment: Are the Deficits Really Twins?," Economic Inquiry, Western Economic Association International, vol. 31(4), pages 580-594, October.
    9. John K. Hill, 1989. "Demographics and the trade balance," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Sep, pages 1-11.
    10. B. Douglas Bernheim, 1988. "Budget Deficits and the Balance of Trade," NBER Chapters,in: Tax Policy and the Economy: Volume 2, pages 1-32 National Bureau of Economic Research, Inc.
    11. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
    12. Michael Hutchison & Charles Pigott, 1984. "Budget deficits, exchange rates and the current account: theory and U. S. evidence," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 5-25.
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    Cited by:

    1. Koscianski, Janet & Mathis, Stephen, 1995. "Excess capacity and the probability of entry An application to the US titanium industry," Resources Policy, Elsevier, vol. 21(1), pages 43-51, March.

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