Better thy Neighbor? Cross-border Effects of Fiscal Actions

From a new IMF blog: “Our analysis provides information on potential cross-country effects from domestic fiscal policies. For example, fiscal stimulus in Germany through higher public investment would generate meaningful spillovers to neighboring countries in Europe where output remains below potential and interest rates are exceptionally low. Spending on public investment is also likely to produce greater cross-border dividends than tax cuts. Conversely, given cyclical conditions in the United States, a U.S. fiscal stimulus would likely have modest spillovers, especially if implemented through tax policy measures.”

ENG_Sept_26_WEO_ch4_chart_1

Continue reading here.

 

Posted by at 10:46 AM

Labels: Inclusive Growth

Home

Subscribe to: Posts