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Title: |
An Empirical Analysis of Ricardian Equivalence
on Real Exchange Rate and Current Account: Korea |
| Author: |
Yi, Chae-Deug |
| Author
Affiliation: |
Dong-Eui U |
| Source: |
International Economic Journal, Winter 2003, v. 17, no. 4, pp. 61-83 |
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Publication Date: |
Winter 2003 |
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Abstract: |
This paper
investigates the responses of real exchange rate and current account as
well as consumption in a small open economy to fiscal policies using an
alternative time horizon model. Cointegration tests present that there
is no stable relationship between the fiscal variables and the real
exchange rate, current account, or consumption. The maximum likelihood
estimation suggests that fiscal policies seem not to be much more
effective as the conventional or finite horizon model predicts. REP with
infinite horizons seems to be more conceivable to explaining the
fluctuation of consumption, real exchange rate, and current account in
Korea. |
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