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

Author

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  • Prilepskiy, Ilya

    () (Economic experts group)

Abstract

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.

Suggested Citation

  • Prilepskiy, Ilya, 2015. "The impact of fiscal policy on the current account balance and the real exchange rate," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 7-23.
  • Handle: RePEc:rnp:ecopol:e15610
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    References listed on IDEAS

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    More about this item

    Keywords

    fiscal policy; current account balance; the real exchange rate;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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