Fiscal policy, international spillovers, and endogenous productivity

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dc.contributor.authorKlein, Mathias
dc.contributor.authorLinnemann, Ludger
dc.date.accessioned2021-12-14T13:54:30Z
dc.date.available2021-12-14T13:54:30Z
dc.date.issued2021
dc.description.abstractThe paper presents empirical evidence on the international effects of US fiscal policy from structural vector autoregressions identified through external instruments in a panel setting for the G7 countries. An exogenous increase in US government spending is estimated to produce sizeable positive responses of output and consumption in the rest of the G7 countries, both about half as large as their domestic US counterparts, while strongly depreciating the US terms of trade and lowering short-run real interest rates. Moreover, fiscal shocks are estimated to have a strongly positive impact on hourly labor productivity in the private sector. We solve a two-country New Keynesian model in closed form and show that a low cost elasticity of varying technology utilization can simultaneously explain the positive productivity, consumption and international spillover effects as well as the real depreciation resulting from expansionary US government spending shocks.en
dc.identifier.urihttp://hdl.handle.net/2003/40607
dc.identifier.urihttp://dx.doi.org/10.17877/DE290R-22477
dc.language.isoende
dc.relation.ispartofseriesDiscussion Paper / SFB823;27/2021en
dc.subjectinternational transmission of fiscal shocksen
dc.subjectproxy-vector autoregressionsen
dc.subjectterms of tradeen
dc.subjectlabor productivityen
dc.subjectgovernment spendingen
dc.subject.ddc310
dc.subject.ddc330
dc.subject.ddc620
dc.titleFiscal policy, international spillovers, and endogenous productivityen
dc.typeTextde
dc.type.publicationtypeworkingPaperde
dcterms.accessRightsopen access
eldorado.secondarypublicationfalsede

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Sonderforschungsbereich (SFB) 823