at Google ScholarTitle data
Herz, Bernhard ; Hohberger, Stefan:
Fiscal policy, monetary regimes and current account dynamics.
In: Review of International Economics.
Vol. 21
(2013)
Issue 1
.
- pp. 118-136.
ISSN 1467-9396
DOI: https://doi.org/10.1111/roie.12024
Abstract in another language
For the individual European Monetary Union (EMU) members fiscal policy has gained in importance owing to the loss of monetary policy as an autonomous policy instrument. Based on a small open economy dynamic stochastic general equilibrium (DSGE) model with fiscal feedback rules, we analyze the dynamic macroeconomic response in particular of the current account under alternative exchange rate regimes. Our results indicate that entry into monetary union makes the economy more vulnerable to a productivity shock and leads to higher variability of the current account. For a risk premium shock, an entry into EMU implies lower variability of most macroeconomic variables, but a higher persistence in the adjustment process of the current account. For both shocks, a countercyclical fiscal response to the current account is more stabilizing for most macroeconomic variables than a conventional countercyclical response to output. Stabilizing the current account comes at the price of higher variability of output in the short-run, however.
Further data
| Item Type: | Article in a journal |
|---|---|
| Refereed: | Yes |
| Institutions of the University: | Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I - International Economics and Finance > Chair Economics I - International Economics and Finance - Univ.-Prof. Dr. Bernhard Herz Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I - International Economics and Finance |
| Result of work at the UBT: | Yes |
| DDC Subjects: | 300 Social sciences > 330 Economics |
| Date Deposited: | 31 Mar 2015 08:10 |
| Last Modified: | 31 Mar 2015 08:10 |
| URI: | https://eref.uni-bayreuth.de/id/eprint/9524 |