{
  "title": "Does Fiscal Policy Matter for the Trade Account? A Panel Cointegration Study",
  "publication": "IMF Working Papers, June 1, 2006",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/index.md",
  "summary": "This paper analyzes the empirical relationship between fiscal policy and the trade account. Research prior to this paper did not consider that the components of private and public demand in the import demand equation exhibit different elasticities.",
  "sections": [
    {
      "heading": "Authors and Publication",
      "content": "- Authors: Christiane Nickel, Katja Funke\n- Publication date: June 1, 2006\n- Series: Working Paper No. 2006/147\n- Issue: 147\n- Volume: 2006\n- Pages: 27\n- DOI: https://doi.org/10.5089/9781451864076.001\n- Stock No: WPIEA2006147\n- ISBN: 9781451864076\n- ISSN: 1018-5941"
    },
    {
      "heading": "Research Question and Scope",
      "content": "- Research question: Empirical relationship between fiscal policy and the trade account.\n- Sample: annual panel data of the G-7 countries for the years 1970 through 2002.\n- Key subject tags: Expenditure, Exports, Imports, Private consumption, Private investment.\n- Keywords: fiscal policy, government expenditure, WP."
    },
    {
      "heading": "Methodology",
      "content": "- Estimation technique: pooled mean group estimation.\n- Distinct modeling choice: explicitly accounts for different elasticities of the components of private and public demand in the import demand equation."
    },
    {
      "heading": "Core Findings",
      "content": "- The composition of overall demand—that is, the distribution among public demand, private demand, and export demand—has an impact on the magnitude of the trade account deficit.\n- Empirical evidence is provided using the described pooled mean group estimation on the G-7 panel covering 1970 through 2002."
    },
    {
      "heading": "Implications",
      "content": "- Fiscal policy matters for the trade account not only through aggregate demand levels but also through the composition of demand between public and private components and exports.\n- Policy analysis of trade deficits should consider differential import elasticities across demand components when assessing fiscal policy effects.\n\nSource: IMF Working Paper — \"Does Fiscal Policy Matter for the Trade Account? A Panel Cointegration Study\" (Nickel and Funke, June 1, 2006).\n\n---\n\n Content in this bundle\n\n- wp06147\n  - wp06147 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp06147 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/bundle-manifest.json)",
    "Authors: Christiane Nickel, Katja Funke",
    "Published: June 1, 2006",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451864076.001",
    "Authors: Christiane Nickel, Katja Funke",
    "Publication date: June 1, 2006",
    "Series: Working Paper No. 2006/147",
    "Issue: 147",
    "Volume: 2006",
    "Pages: 27",
    "DOI: https://doi.org/10.5089/9781451864076.001",
    "Stock No: WPIEA2006147",
    "ISBN: 9781451864076",
    "ISSN: 1018-5941",
    "Research question: Empirical relationship between fiscal policy and the trade account.",
    "Sample: annual panel data of the G-7 countries for the years 1970 through 2002.",
    "Key subject tags: Expenditure, Exports, Imports, Private consumption, Private investment.",
    "Keywords: fiscal policy, government expenditure, WP.",
    "Estimation technique: pooled mean group estimation.",
    "Distinct modeling choice: explicitly accounts for different elasticities of the components of private and public demand in the import demand equation.",
    "The composition of overall demand—that is, the distribution among public demand, private demand, and export demand—has an impact on the magnitude of the trade account deficit.",
    "Empirical evidence is provided using the described pooled mean group estimation on the G-7 panel covering 1970 through 2002.",
    "Fiscal policy matters for the trade account not only through aggregate demand levels but also through the composition of demand between public and private components and exports.",
    "Policy analysis of trade deficits should consider differential import elasticities across demand components when assessing fiscal policy effects.",
    "**_wp06147**"
  ],
  "related": [
    {
      "title": "_wp06147",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06147.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06147.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06147.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/does-fiscal-policy-matter-for-the-trade-account-a-panel-cointegration-study-19274/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T12:17:07.170Z"
}