Erceg, Christopher J.
Trade policies and fiscal devaluations / Christopher Erceg, Andrea Prestipino and Andrea Raffo
Resumen.
Bibliografía.
Fiscal devaluations—an increase in import tariffs and export subsidies (IX) or an increase in value-added taxes and payroll subsidies (VP)—have been shown to provide as much stimulus under fixed exchange rates as a currency devaluation. We find that if agents expect policies to be reversed and the tax pass-through is large, VP is contractionary and IX provides a modest boost. In our medium-scale DSGE model, both features are crucial in accounting for Germany's underperformance in response to VP in 2007. These findings cast doubt on fiscal devaluations as a cyclical stabilization tool when monetary policy is constrained.
COMERCIO
IMPUESTOS
REDUCCIONES TRIBUTARIAS
POLITICA FISCAL
ACUERDOS COMERCIALES
MODELOS ECONOMETRICOS
Prestipino, Andrea
Raffo, Andrea
American Economic Journal : Macroeconomics 1945-7707 v. 15, n. 4, October 2023, p. 104-140
Trade policies and fiscal devaluations / Christopher Erceg, Andrea Prestipino and Andrea Raffo
Resumen.
Bibliografía.
Fiscal devaluations—an increase in import tariffs and export subsidies (IX) or an increase in value-added taxes and payroll subsidies (VP)—have been shown to provide as much stimulus under fixed exchange rates as a currency devaluation. We find that if agents expect policies to be reversed and the tax pass-through is large, VP is contractionary and IX provides a modest boost. In our medium-scale DSGE model, both features are crucial in accounting for Germany's underperformance in response to VP in 2007. These findings cast doubt on fiscal devaluations as a cyclical stabilization tool when monetary policy is constrained.
COMERCIO
IMPUESTOS
REDUCCIONES TRIBUTARIAS
POLITICA FISCAL
ACUERDOS COMERCIALES
MODELOS ECONOMETRICOS
Prestipino, Andrea
Raffo, Andrea
American Economic Journal : Macroeconomics 1945-7707 v. 15, n. 4, October 2023, p. 104-140