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Productive Government Expenditures and the Current Account

Productive Government Expenditures and the Current Account Abstract This paper examines the effects of a change in government expenditure on the current account of the balance of payments using the optimizing approach. It is assumed that government expenditure is productive, and is regarded as an input in the aggregate production function. Based on the Blanchard-Fischer-type model, the paper demonstrates decisively that the current account deficit is due to a permanent increase in government expenditure. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Japanese Economic Review Springer Journals

Productive Government Expenditures and the Current Account

Okumura, Ryuhei
The Japanese Economic Review , Volume 49 (4): 8 – Dec 1, 1998
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References (12)

Publisher
Springer Journals
Copyright
1998 Japanese Economic Association
ISSN
1352-4739
eISSN
1468-5876
DOI
10.1111/1468-5876.00096
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper examines the effects of a change in government expenditure on the current account of the balance of payments using the optimizing approach. It is assumed that government expenditure is productive, and is regarded as an input in the aggregate production function. Based on the Blanchard-Fischer-type model, the paper demonstrates decisively that the current account deficit is due to a permanent increase in government expenditure.

Journal

The Japanese Economic Review – Springer Journals

Published: Dec 1, 1998

Keywords: economics, general; microeconomics; macroeconomics/monetary economics//financial economics; econometrics; development economics; economic history

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