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Title: |
Government Spending and the Current Account:
Some
International Evidence |
| Author: |
Karras,
Georgios; Song, Frank |
| Author
Affiliation: |
U IL, Chicago;
Cleveland State U |
| Source: |
International Economic Journal, Winter 1995, v. 9, no. 4, pp. 45-56 |
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Publication Date: |
Winter 1995 |
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Abstract: |
This paper examines the current account
effects of government spending. It is shown that in a neoclassical
framework transitory (permanent) changes in government spending reduce
(leave unaffected) the trade balance. Using data for Australia, Italy,
Sweden, the U.K., and the U.S., the paper finds that the effects of
permanent changes are consistent with the theory for all countries,
whereas those of transitory changes are consistent only for the U.K. and
the U.S. Potential explanations are offered, and policy implications are
discussed. |
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