Government Spending and the Real Exchange Rate
I study the effect of government spending on the real exchange rate in a model exhibiting complementarily between consumption at different points in time. I show that the standard result of fiscal expansions causing real appreciations may hold, although not always, in this intertemporal framework. I also examine the time series from a cross section of European countries for the period 1970-1982 and find that the standard result is supported by the data. More importantly, I show that increases in government expenditures appear to have been the single most important cause behind the decline of the manufacturing sector in those countries.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: 3254 Steinberg Hall-Dietrich Hall, Philadelphia, PA 19104-6367|
Phone: (215) 898-7616
Fax: (215) 573-8084
Web page: http://finance.wharton.upenn.edu/~rlwctr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:pennfi:23-85. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.