IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Welfare Effects of Fiscal Policy under Alternative Exchange Rate Regimes : The Role of the Scale Variable of Money Demand

Listed author(s):
  • Pitterle, Ingo
  • Steffen, Dirk

This paper investigates the implications of alternative scale variables of money demand for the comparison of a flexible exchange rate regime with a monetary union in a NOEM setup. The welfare evaluation of exchange rate regimes depends on the exchange rate response under the flexible regime. When the scale variable is private consumption, a domestic fiscal expansion yields a depreciation. As the associated expenditure switching and terms-of-trade effects are beneficial to the domestic country, households prefer flexible exchange rates. However, when the scale variable is total absorption, we obtain an appreciation and the welfare results are reversed.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://www.econstor.eu/bitstream/10419/22083/1/284.pdf
Download Restriction: no

Paper provided by University of Tübingen, School of Business and Economics in its series Tübinger Diskussionsbeiträge with number 284.

as
in new window

Length:
Date of creation: 2004
Handle: RePEc:zbw:tuedps:284
Contact details of provider: Postal:
Keplerstr. 17, 72074 Tübingen

Phone: 07071/29-72563
Fax: 07071/29-5179
Web page: http://www.uni-tuebingen.de/en/faculties/wirtschafts-und-sozialwissenschaftliche-fakultaet/faecher/wirtschaftswissenschaft.html
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Ganelli, Giovanni & Lane, Philip R., 2002. "Dynamic General Equilibrium Analysis: The Open Economy Dimension," CEPR Discussion Papers 3540, C.E.P.R. Discussion Papers.
  2. Ganelli, Giovanni, 2003. "Useful government spending, direct crowding-out and fiscal policy interdependence," Journal of International Money and Finance, Elsevier, vol. 22(1), pages 87-103, February.
  3. Werner Gueth & Manfred Stadler, 2004. "Path Dependence Without Denying Deliberation - An Exercise Model Connecting Rationality and Evolution -," Papers on Strategic Interaction 2004-07, Max Planck Institute of Economics, Strategic Interaction Group.
  4. Ronald McKinnon & Gunther Schnabl, 2003. "China: A Stabilizing or Deflationary Influence in East Asia? The Problem of Conflicted Virtue," Working Papers 03007, Stanford University, Department of Economics.
  5. Baur, Dirk, 2002. "The persistence and asymmetry of time-varying correlations," Tübinger Diskussionsbeiträge 232, University of Tübingen, School of Business and Economics.
  6. Ronald McKinnon & Gunther Schnabl, 2004. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 331-360, 08.
  7. Schnabl, Gunther, 2003. "De jure versus de facto: Exchange rate stabilization in Central and Eastern Europe," Tübinger Diskussionsbeiträge 269, University of Tübingen, School of Business and Economics.
  8. Stephanie Schmitt-Grohe & Martin Uribe, 1998. "Price Level Determinacy and Monetary Policy under a Balanced-Budget Requirement," Departmental Working Papers 199833, Rutgers University, Department of Economics.
  9. Cedric Tille, 1999. "The role of consumption substitutability in the international transmission of shocks," Staff Reports 67, Federal Reserve Bank of New York.
  10. Wapler, Rüdiger, 2001. "Unions, growth and unemployment," Tübinger Diskussionsbeiträge 206, University of Tübingen, School of Business and Economics.
  11. Sutherland, Alan, 1996. "Exchange Rate Dynamics and Financial Market Integration," CEPR Discussion Papers 1337, C.E.P.R. Discussion Papers.
  12. Mankiw, N Gregory & Summers, Lawrence H, 1986. "Money Demand and the Effects of Fiscal Policies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(4), pages 415-429, November.
  13. Stadler, Manfred & Wapler, Rüdiger, 2001. "Endogenous skilled-biased technological change and matching unemployment," Tübinger Diskussionsbeiträge 220, University of Tübingen, School of Business and Economics.
  14. Obstfeld, Maurice & Rogoff, Kenneth S., 1995. "Exchange Rate Dynamics Redux," Scholarly Articles 12491026, Harvard University Department of Economics.
  15. Kiesewetter, Dirk & Niemann, Rainer, 2001. "Beiträge und Rentenzahlungen in einer entscheidungsneutralen Einkommensteuer
    [Contributions and pension payments in a decision-neutral income tax]
    ," MPRA Paper 27324, University Library of Munich, Germany.
  16. Heilig, Stephan & Schöbel, Rainer, 2001. "Controlling chaos in a model with heterogeneous beliefs," Tübinger Diskussionsbeiträge 205, University of Tübingen, School of Business and Economics.
  17. Neubecker, Leslie & Stadler, Manfred, 2003. "In hunt for size: Merger formation in the oil industry," Tübinger Diskussionsbeiträge 258, University of Tübingen, School of Business and Economics.
  18. Baur, Dirk & Schulze, Niels, 2005. "Coexceedances in financial markets--a quantile regression analysis of contagion," Emerging Markets Review, Elsevier, vol. 6(1), pages 21-43, April.
  19. Kukuk, Martin & Stadler, Manfred, 2002. "Rivalry and innovation races," Tübinger Diskussionsbeiträge 236, University of Tübingen, School of Business and Economics.
  20. N. Gregory Mankiw, 1985. "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 100(2), pages 529-538.
  21. Aoki, Masanao, 1985. "Misadjustment to anticipated shocks: an example of exchange-rate response," Journal of International Money and Finance, Elsevier, vol. 4(3), pages 415-420, September.
  22. Lucas, Robert Jr., 1982. "Interest rates and currency prices in a two-country world," Journal of Monetary Economics, Elsevier, vol. 10(3), pages 335-359.
  23. Schnabl, Gunther, 2001. "Weak economy and strong currency: The origins of the strong yen in the 1990's," Tübinger Diskussionsbeiträge 218, University of Tübingen, School of Business and Economics.
  24. Knirsch, Deborah, 2002. "Neutrality-based effective tax rates," Tübinger Diskussionsbeiträge 249, University of Tübingen, School of Business and Economics.
  25. Tille, Cedric, 2001. "The role of consumption substitutability in the international transmission of monetary shocks," Journal of International Economics, Elsevier, vol. 53(2), pages 421-444, April.
  26. Lucas, Robert E, Jr, 1980. "Equilibrium in a Pure Currency Economy," Economic Inquiry, Western Economic Association International, vol. 18(2), pages 203-220, April.
  27. Martine Carre & Fabrice Collard, 2000. "Monetary Union: A Welfare Based Approach," Econometric Society World Congress 2000 Contributed Papers 0526, Econometric Society.
  28. Licht, Georg & Stadler, Manfred, 2003. "Auswirkungen öffentlicher Forschungsförderung auf die private F&E-Tätigkeit: Eine mikroökonomische Evaluation," Tübinger Diskussionsbeiträge 256, University of Tübingen, School of Business and Economics.
  29. Bayer, Stefan, 2003. "Possibilities and limitations of economically valuating ecological damages," Tübinger Diskussionsbeiträge 254, University of Tübingen, School of Business and Economics.
  30. Neus, Werner, 2002. "Fusionsanreize, strategische Managerentlohnung und die Frage des geeigneten Unternehmensziels," Tübinger Diskussionsbeiträge 244, University of Tübingen, School of Business and Economics.
  31. Neubecker, Leslie, 2001. "Aktienkursorientierte Management-Entlohnung: Ein Wettbewerbshemmnis im Boom?," Tübinger Diskussionsbeiträge 225, University of Tübingen, School of Business and Economics.
  32. Ronald McKinnon & Gunther Schnabl, 2003. "Synchronised Business Cycles in East Asia and Fluctuations in the Yen/Dollar Exchange Rate," The World Economy, Wiley Blackwell, vol. 26(8), pages 1067-1088, 08.
  33. Charles T. Carlstrom & Timothy S. Fuerst, 2001. "Real Indeterminacy in Monetary Models with Nominal Interest Rate Distortions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(4), pages 767-789, October.
  34. Robert Miguel W. K. Kollman, 1999. "Explaining International Comovements of Output and Asset Returns; The Role of Money and Nominal Rigidities," IMF Working Papers 99/84, International Monetary Fund.
  35. Niemann, Rainer & Kiesewetter, Dirk, 2002. "Zur steuerlichen Vorteilhaftigkeit von Kapitallebensversicherungen," Tübinger Diskussionsbeiträge 239, University of Tübingen, School of Business and Economics.
  36. Betts, Caroline & Devereux, Michael B., 2000. "Exchange rate dynamics in a model of pricing-to-market," Journal of International Economics, Elsevier, vol. 50(1), pages 215-244, February.
  37. Kiesewetter, Dirk, 2002. "Tax neutrality and business taxation in Russia: A proposal for a consumption-based reform of the Russian income and profit tax," Tübinger Diskussionsbeiträge 242, University of Tübingen, School of Business and Economics.
  38. Robert Kollmann, 2001. "The exchange rate in a dynamic-optimizing business cycle model with nominal rigidities: a quantitative investigation," ULB Institutional Repository 2013/7630, ULB -- Universite Libre de Bruxelles.
  39. Daniel L. Thornton, 1988. "Should consumer expenditures be the scale variable in empirical money demand equations?," Working Papers 1988-003, Federal Reserve Bank of St. Louis.
  40. Gampfer, Ralf, 2002. "Fallende Preise in sequentiellen Auktionen: Das Beispiel des Gebrauchtwagenhandels," Tübinger Diskussionsbeiträge 231, University of Tübingen, School of Business and Economics.
  41. Starbatty, Joachim, 2002. "Die Abschaffung der DM ist noch keine Bereitschaft zur politischen Union," Tübinger Diskussionsbeiträge 246, University of Tübingen, School of Business and Economics.
  42. J.Baten & J.Wallusch, 2005. "Market Integration and Disintegration of Poland and Germany in the 18th Century," Economies et Sociétés (Serie 'Histoire Economique Quantitative'), Association Française de Cliométrie (AFC), issue 33, pages 1233-1264, July.
  43. Stadler, Manfred, 2002. "Leistungsorientierte Besoldung von Hochschullehrern auf der Grundlage objektiv messbarer Kriterien," Tübinger Diskussionsbeiträge 237, University of Tübingen, School of Business and Economics.
  44. Jung, Robert & Tremayne, Andrew R., 2001. "Testing serial dependence in time series models of counts against some INARMA alternatives," Tübinger Diskussionsbeiträge 204, University of Tübingen, School of Business and Economics.
  45. Brassat, Marcel & Kiesewetter, Dirk, 2003. "Steuervorteile durch Versorgungszusagen in Arbeitsverträgen
    [Tax benefits from employer-sponsored pension plans]
    ," MPRA Paper 27262, University Library of Munich, Germany.
  46. Hairault, J.O. & Portier, F., 1992. "Money New-Keynesian Macroeconomics and the Business Cycles," Papiers d'Economie Mathématique et Applications 92.32, Université Panthéon-Sorbonne (Paris 1).
  47. Neubecker, Leslie, 2002. "The strategic effect of debt in dynamic price competition with fluctuating demand," Tübinger Diskussionsbeiträge 250, University of Tübingen, School of Business and Economics.
  48. Leonor Coutinho, 2003. "Fiscal Policy in the New Open Economy. Macroeconomics and Prospects for Fiscal Policy Coordination," Economics Working Papers 021, European Network of Economic Policy Research Institutes.
  49. Stadler, Manfred, 2004. "Bildung, Innovationsdynamik und Produktivitätswachstum," Tübinger Diskussionsbeiträge 280, University of Tübingen, School of Business and Economics.
  50. Preuße, Heinz Gert, 2001. "How do Latin Americans think about the economic reforms of the 1990s?," Tübinger Diskussionsbeiträge 221, University of Tübingen, School of Business and Economics.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:tuedps:284. 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: (ZBW - German National Library of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.