Trade Flows and Fiscal Multipliers
Bibliographic Data
| ID | 19316399 |
|---|---|
| Authors | Matteo Cacciatore (HEC Montreal, Bank of Canada, and NBER), Nora Traum (HEC Montréal) |
| Year | 2022 |
| Volume | 104 |
| Issue | 6 |
| Pages | 1206-1223 |
| Publication date | 2022-11-14 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | The Review of Economics and Statistics (JOURNAL) |
| Journal identifiers | ISSN: 0034-6535 • E-ISSN: 1530-9142 |
| Publisher | MIT Press (PUBLISHER • US) |
| DOI | 10.1162/rest_a_00985 |
| OpenAlex | W3047641365 |
| Language | EN |
| Citations received | 3 |
| References cited | 46 |
We present novel insights on the role of international trade following unanticipated fiscal changes in a flexible exchange rate environment. We show analytically that fiscal multipliers can be larger in economies more open to trade, even when fiscal expansions imply trade deficits. Three factors determine how trade linkages matter: the relative import share of public and private goods, the financing of government debt, and the currency invoicing of exports. A Bayesian prior-predictive analysis shows that a quantitative model bears the same predictions. Conditioning on Canadian and U.S. data, we find support for larger multipliers relative to a counterfactually closed economy
Currency · Debt · Economics · Exchange rate · Fiscal policy · Government spending · International economics · Macroeconomics · Monetary economics · Open economy · Small open economy · Terms of trade · Welfare · Fiscal Policies and Political Economy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact
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| Unique citing works | 3 |
|---|---|
| Citations per year | 0.75 |
| Citation span | 2022 - 2025 (4) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 3 |