Fiscal deficits and current account deficits /

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Bibliographic Details
Author / Creator:	Kumhof, Michael, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2009.
Description:	1 online resource (35 pages) : color illustrations.
Language:	English
Series:	IMF working paper ; WP/09/237 IMF working paper ; WP/09/237.
Subject:	Finance, Public -- Econometric models. Budget deficits -- Econometric models. Debts, Public -- Econometric models. Accounts current. Fiscal policy. Accounts current. Budget deficits -- Econometric models. Debts, Public -- Econometric models. Finance, Public -- Econometric models. Fiscal policy.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12498490

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Other authors / contributors:	Laxton, Douglas, author. International Monetary Fund. Research Department.
ISBN:	1462316417 9781462316410 9786612844386 6612844388 1452706670 9781452706672 1451873840 9781451873849 1282844385 9781282844384
Notes:	Includes bibliographical references (pages 25-27). English. Print version record.
Summary:	The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. We show that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they significantly raise the world real interest rate. Second, they cause a short run current account deterioration equal to around 50 percent of the fiscal deficit deterioration. Third, the longer run current account deterioration equals almost 75 percent for a large economy such as the United States, and almost 100 percent for a small open economy.
Other form:	145191802X

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