05460oam 22012134 450 991097121720332120250426110708.0978661284438697814623164101462316417978145270667214527066709781451873849145187384097812828443841282844385(CKB)3170000000055378(SSID)ssj0000940822(PQKBManifestationID)11967053(PQKBTitleCode)TC0000940822(PQKBWorkID)10955591(PQKB)11297535(OCoLC)694140991(IMF)WPIEE2009237(MiAaPQ)EBC1608858(IMF)WPIEA2009237WPIEA2009237(EXLCZ)99317000000005537820020129d2009 uf 0engurcn|||||||||txtccrFiscal Deficits and Current Account Deficits /Michael Kumhof, Douglas Laxton1st ed.Washington, D.C. :International Monetary Fund,2009.23 p. illIMF Working Papers"October 2009".9781451918021 145191802X Includes bibliographical references.Cover Page -- Title Page -- Copyright Page -- Contents -- I. Introduction -- 1. IMF WEO and CBO Baseline Deficit and Debt Projections for the United States -- 2. CBO Long-Term Projections for U.S. Fiscal Deficits and Debt -- II. The Model -- A. Households -- 3. Dissaving and the Role of the Planning Horizon -- B. Firms -- 1. Manufacturers -- 2. Distributors -- 3. Retailers -- C. Government -- 1. Budget Constraint -- 2. Fiscal Policy -- 3. Monetary Policy -- D. Equilibrium and Balance of Payments -- III. Calibration -- IV. Permanent Increases in Fiscal Deficits -- A. U.S. Fiscal Deficits -- 4. One Percentage Point Deficit Shock, Instrument = Taxation, Part I -- 5. One Percentage Point Deficit Shock, Instrument = Taxation, Part II -- 6. One Percentage Point Deficit Shock, Instrument = Taxation, Part III -- 7. Current Account Deficit and the Planning Horizon -- 8. Real Interest Rate and the Planning Horizon -- B. Sensitivity Analysis -- C. Small Open Economies -- 9. One Percentage Point Deficit Shock in a Small Open Economy -- 10. Large Open Economy Dissaving -- 11. Small Open Economy Dissaving -- V. Conclusion -- References -- Footnotes.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.IMF Working Papers; Working Paper ;No. 2009/237Finance, PublicEconometric modelsDebts, PublicAccounts currentFiscal policyBalance of paymentsimfBanks and BankingimfCurrent Account AdjustmentimfCurrent account deficitsimfCurrent accountimfDebt ManagementimfDebtimfDebts, PublicimfExports and ImportsimfFinanceimfGovernment debt managementimfInterest ratesimfInterest Rates: Determination, Term Structure, and EffectsimfInternational economicsimfPublic debtimfPublic finance & taxationimfPublic FinanceimfReal interest ratesimfShort-term Capital MovementsimfSovereign DebtimfUnited StatesimfFinance, PublicEconometric models.Debts, Public.Accounts current.Fiscal policy.Balance of paymentsBanks and BankingCurrent Account AdjustmentCurrent account deficitsCurrent accountDebt ManagementDebtDebts, PublicExports and ImportsFinanceGovernment debt managementInterest ratesInterest Rates: Determination, Term Structure, and EffectsInternational economicsPublic debtPublic finance & taxationPublic FinanceReal interest ratesShort-term Capital MovementsSovereign Debt338.973Kumhof Michael1815645Laxton Douglas1594457International Monetary Fund.Research Dept.DcWaIMFBOOK9910971217203321Fiscal Deficits and Current Account Deficits4372880UNINA