LEADER 06306oam 22011774 450 001 9910779216903321 005 20230802005436.0 010 $a1-4639-4565-5 010 $a1-4639-4564-7 035 $a(CKB)2550000000106244 035 $a(EBL)1606592 035 $a(SSID)ssj0000953154 035 $a(PQKBManifestationID)11510998 035 $a(PQKBTitleCode)TC0000953154 035 $a(PQKBWorkID)10906460 035 $a(PQKB)11482138 035 $a(MiAaPQ)EBC1606592 035 $a(Au-PeEL)EBL1606592 035 $a(CaPaEBR)ebr10566414 035 $a(OCoLC)777372521 035 $a(IMF)WPIEE2012052 035 $a(IMF)WPIEA2012052 035 $a(EXLCZ)992550000000106244 100 $a20020129d2012 uf 0 101 0 $aeng 135 $aurcn||||||||| 181 $ctxt 182 $cc 183 $acr 200 10$aFiscal Policy and the Real Exchange Rate /$fSantanu Chatterjee, Azer Mursagulov 210 1$aWashington, D.C. :$cInternational Monetary Fund,$d2012. 215 $a1 online resource (42 p.) 225 1 $aIMF Working Papers 300 $a"February 2012." 311 $a1-4639-4563-9 311 $a1-4639-3713-X 320 $aIncludes bibliographical references. 327 $aCover; Contents; 1. Introduction; 2. The Analytical Framework; 2.1. Resource allocation in the private sector; 2.2. The public sector; 2.3. Macroeconomic equilibrium; 2.4. Current account dynamics; 3. Numerical Analysis; 3.1. The benchmark equilibrium; 3.2. Fiscal policy shocks; 3.3. Exchange rate dynamics: sensitivity to financing policies; 3.4. The persistence of the real exchange rate; 3.5. The short-run correlation between government spending and private consumption; 4. Sensitivity Analysis; 4.1. Sectoral output elasticity of public capital; 4.2. Elasticity of substitution in production 327 $a4.3. Intersectoral adjustment costs 5. Conclusions; Tables; 1. Benchmark equilibrium; 2. Government spending shocks: Long-run effects; 3. Government spending and the real exchange rate; 4. Government spending and short-run consumption; Figures; 1. Government spending shocks; 2. Government spending and the real exchange rate: sensitivity to financing policies; 3. Government spending, the persistence of the real exchange rate, and the time horizon; 4. Government spending and consumption: sensitivity to the sectoral elasticity of public capital 327 $a5. Government spending and the real exchange rate: sensitivity to the sectoral elasticity of public capital 6. Government spending and the real exchange rate: sensitivity to the elasticity of substitution in production; 7. Government spending and the real exchange rate: sensitivity to intersectoral adjustment costs; References 330 3 $aGovernment spending on infrastructure has recently increased sharply in many emerging-market economies. This paper examines the mechanism through which public infrastructure spending affects the dynamics of the real exchange rate. Using a two-sector dependent open economy model with intersectoral adjustment costs, we show that government spending generates a non-monotonic U-shaped adjustment path for the real exchange rate with sharp intertemporal trade-offs. The effect of government spending on the real exchange rate depends critically on (i) the composition of public spending, (ii) the underlying financing policy, (iii) the intensity of private capital in production, and (iv) the relative productivity of public infrastructure. In deriving these results, the model also identifies conditions under which the predictions of the neoclassical open economy model can be reconciled with empirical regularities, namely the intertemporal relationship between government spending, private consumption, and the real exchange rate. 410 0$aIMF Working Papers; Working Paper ;$vNo. 2012/052 606 $aForeign exchange rates 606 $aFiscal policy 606 $aGovernment spending policy 606 $aForeign Exchange$2imf 606 $aMacroeconomics$2imf 606 $aPublic Finance$2imf 606 $aNational Government Expenditures and Related Policies: General$2imf 606 $aNational Government Expenditures and Related Policies: Infrastructures$2imf 606 $aOther Public Investment and Capital Stock$2imf 606 $aMacroeconomics: Consumption$2imf 606 $aSaving$2imf 606 $aWealth$2imf 606 $aCurrency$2imf 606 $aForeign exchange$2imf 606 $aPublic finance & taxation$2imf 606 $aReal exchange rates$2imf 606 $aExpenditure$2imf 606 $aPublic investment spending$2imf 606 $aPublic investment and public-private partnerships (PPP)$2imf 606 $aConsumption$2imf 606 $aNational accounts$2imf 606 $aExpenditures, Public$2imf 606 $aPublic investments$2imf 606 $aPublic-private sector cooperation$2imf 606 $aEconomics$2imf 607 $aBrazil$2imf 615 0$aForeign exchange rates. 615 0$aFiscal policy. 615 0$aGovernment spending policy. 615 7$aForeign Exchange 615 7$aMacroeconomics 615 7$aPublic Finance 615 7$aNational Government Expenditures and Related Policies: General 615 7$aNational Government Expenditures and Related Policies: Infrastructures 615 7$aOther Public Investment and Capital Stock 615 7$aMacroeconomics: Consumption 615 7$aSaving 615 7$aWealth 615 7$aCurrency 615 7$aForeign exchange 615 7$aPublic finance & taxation 615 7$aReal exchange rates 615 7$aExpenditure 615 7$aPublic investment spending 615 7$aPublic investment and public-private partnerships (PPP) 615 7$aConsumption 615 7$aNational accounts 615 7$aExpenditures, Public 615 7$aPublic investments 615 7$aPublic-private sector cooperation 615 7$aEconomics 700 $aChatterjee$b Santanu$0497920 701 $aMursagulov$b Azer$01518531 712 02$aInternational Monetary Fund. 801 0$bDcWaIMF 906 $aBOOK 912 $a9910779216903321 996 $aFiscal Policy and the Real Exchange Rate$93756121 997 $aUNINA