Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153054
Authors: 
Funke, Katja
Nickel, Christiane
Year of Publication: 
2006
Series/Report no.: 
ECB Working Paper 620
Abstract: 
This paper analyses the empirical relationship between fiscal policy and the trade account. Research prior to this paper did not consider that the components of private and public demand in the import demand equation exhibit different elasticities. Using pooled mean group estimation for annual panel data of the G7 countries for the years 1970 through 2002, we provide empirical evidence that the composition of overall demand – i.e. the distribution among public demand, private demand and export demand – has an impact on the magnitude of the trade account deficit.
Subjects: 
Fiscal Policy
Panel Cointegration
trade account
trade elasticities
JEL: 
F32
E62
F41
Document Type: 
Working Paper

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