This paper studies whether trade openness reduces the domestic fiscal multiplier but increases the impacts of foreign fiscal shocks i.e. the spillover effect as suggested by theory. Using annual data from the period of 1970 to 2011 for 179 developed and developing economies we show that domestic fiscal shocks are less potent in more open economies while foreign (rest of the world) fiscal shocks are more potent in more open economies. © 2014-Center for Economic Integration Sejong Institution Sejong University All Rights Reserved.
Fiscal Policy Spillovers through Trade Openness (PDF Download Available). Available from: https://www.researchgate.net/publication/275106142_Fiscal_Policy_Spillovers_through_Trade_Openness [accessed Jun 23 2017].
Publication year
2007
Authors
Cruz, R.V.O.; Pulhin, J.M.; Pulhin, F.B.; Lasco, R.D.
Keywords
Climate change, Economics, Environment, Watershed management, Watersheds, Floods
