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The impact of fiscal policy on the current account balance and the real exchange rate

Listed author(s):
  • Prilepskiy, Ilya

    ()

    (Economic experts group)

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    The paper examines the impact of fiscal policy in Russia in the current account balance and the real exchange rate. It was found that the deterioration of the balance of the expanded budget in the years 2003-2013 made a significant contribution to the observed in this period, the decline in the current account surplus. A more detailed analysis shows that this decline occurred mainly via the increase in imports due to the further expansion of domestic demand associated with fiscal expansion, while the contribution of soft fiscal policy in the real effective exchange rate for the period was negligible.

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    File URL: ftp://w82.ranepa.ru/rnp/ecopol/e15610.pdf
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    Article provided by Russian Presidential Academy of National Economy and Public Administration in its journal Economic Policy.

    Volume (Year): 6 (2015)
    Issue (Month): ()
    Pages: 7-23

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    Handle: RePEc:rnp:ecopol:e15610
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    1. Chatterjee, Santanu & Mursagulov, Azer, 2016. "Fiscal Policy And The Real Exchange Rate," Macroeconomic Dynamics, Cambridge University Press, vol. 20(07), pages 1742-1770, October.
    2. A. S. Benetrix & P. R. Lane, 2013. "Fiscal Shocks and the Real Exchange Rate," International Journal of Central Banking, International Journal of Central Banking, vol. 9(3), pages 6-37, September.
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    7. International Monetary Fund, 2003. "The Equilibrium Real Exchange Rate in a Commodity Exporting Country; The Case of Russia," IMF Working Papers 03/93, International Monetary Fund.
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    9. Steven T Phillips & Luis Catão & Luca A Ricci & Rudolfs Bems & Mitali Das & Julian Di Giovanni & Filiz D Unsal & Marola Castillo & Jungjin Lee & Jair Rodriguez & Mauricio Vargas, 2013. "The External Balance Assessment (EBA) Methodology," IMF Working Papers 13/272, International Monetary Fund.
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    12. Katerina Kalcheva & Nienke Oomes, 2007. "Diagnosing Dutch Disease; Does Russia Have the Symptoms?," IMF Working Papers 07/102, International Monetary Fund.
    13. E. Gurvich & I. Prilepskiy., 2013. "How to Secure External Sustainability of the Russian Economy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    14. Joseph E. Gagnon, 2011. "Current Account Imbalances Coming Back," Working Paper Series WP11-1, Peterson Institute for International Economics.
    15. S M Ali Abbas & Jacques Bouhga-Hagbe & Antonio Fatás & Paolo Mauro & Ricardo C Velloso, 2011. "Fiscal Policy and the Current Account," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(4), pages 603-629, November.
    16. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
    17. Rodrigo Caputo & Miguel Fuentes, 2012. "Government Spending and the Real Exchange Rate: a Cross - Country Perspective," Working Papers Central Bank of Chile 655, Central Bank of Chile.
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