We investigate the consequences of an increase in public spending for trade balances and budget deficits in the European Union, using a panel vector auto-regression approach. Whereas the literature tends to treat the trade balance/GDP ratio as a single variable, we include exports and imports as...

type="main" xml:lang="en" <title type="main">SUMMARY</title> </section> <title type="main">Spill-overs in the EU</title> <p> We explore international spill-overs from fiscal policy shocks via trade in Europe. To assess and quantify the channels through which a fiscal expansion stimulates domestic activity, foreign exports, and foreign output, we estimate a...</p>

We show how to assess identifying assumptions for a low-frequency SVAR using estimates from a higher-frequency model. In our application quarterly data support identified annual SVARs in government spending and output by assuming zero within-year impact of output on spending.

We explore the international spillovers from fiscal policy shocks via trade in Europe. A fiscal expansion stimulates domestic activity, which leads to more foreign exports and, hence, higher foreign output. To quantify this, we combine a panel VAR model in government spending, net taxes and GDP...

It is widely argued that Europe's unified monetary policy calls for international coordination at the fiscal level. We survey the issues involved with such coordination of fiscal policy as a demand management tool and we use a simple model to investigate the circumstances under which...