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Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups

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Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups. / Cardi, Olivier; Restout, Romain.
In: Macroeconomic Dynamics, Vol. 19, No. 8, 12.2015, p. 1839-1865.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Cardi, O & Restout, R 2015, 'Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups', Macroeconomic Dynamics, vol. 19, no. 8, pp. 1839-1865. https://doi.org/10.1017/S1365100514000133

APA

Cardi, O., & Restout, R. (2015). Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups. Macroeconomic Dynamics, 19(8), 1839-1865. https://doi.org/10.1017/S1365100514000133

Vancouver

Cardi O, Restout R. Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups. Macroeconomic Dynamics. 2015 Dec;19(8):1839-1865. Epub 2014 Apr 11. doi: 10.1017/S1365100514000133

Author

Cardi, Olivier ; Restout, Romain. / Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups. In: Macroeconomic Dynamics. 2015 ; Vol. 19, No. 8. pp. 1839-1865.

Bibtex

@article{e35c75e6da2a4a19a7ea2f611234a364,
title = "Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups",
abstract = "We use a two-sector neoclassical open economy model with traded and nontraded goods and endogenous markups to investigate the effects of temporary fiscal shocks. One central finding is that theory can be reconciled with evidence once we allow for endogenous markups and assume that the traded sector is more capital-intensive than the nontraded sector. More precisely, although both ingredients are essential to produce the real exchange rate depreciation, only the second ingredient is necessary to account for the simultaneous decline in investment and the current account, in line with the evidence.",
author = "Olivier Cardi and Romain Restout",
year = "2015",
month = dec,
doi = "10.1017/S1365100514000133",
language = "English",
volume = "19",
pages = "1839--1865",
journal = "Macroeconomic Dynamics",
issn = "1365-1005",
publisher = "Cambridge University Press",
number = "8",

}

RIS

TY - JOUR

T1 - Fiscal Shocks in a Two Sector Open Economy with Endogenous Markups

AU - Cardi, Olivier

AU - Restout, Romain

PY - 2015/12

Y1 - 2015/12

N2 - We use a two-sector neoclassical open economy model with traded and nontraded goods and endogenous markups to investigate the effects of temporary fiscal shocks. One central finding is that theory can be reconciled with evidence once we allow for endogenous markups and assume that the traded sector is more capital-intensive than the nontraded sector. More precisely, although both ingredients are essential to produce the real exchange rate depreciation, only the second ingredient is necessary to account for the simultaneous decline in investment and the current account, in line with the evidence.

AB - We use a two-sector neoclassical open economy model with traded and nontraded goods and endogenous markups to investigate the effects of temporary fiscal shocks. One central finding is that theory can be reconciled with evidence once we allow for endogenous markups and assume that the traded sector is more capital-intensive than the nontraded sector. More precisely, although both ingredients are essential to produce the real exchange rate depreciation, only the second ingredient is necessary to account for the simultaneous decline in investment and the current account, in line with the evidence.

U2 - 10.1017/S1365100514000133

DO - 10.1017/S1365100514000133

M3 - Journal article

VL - 19

SP - 1839

EP - 1865

JO - Macroeconomic Dynamics

JF - Macroeconomic Dynamics

SN - 1365-1005

IS - 8

ER -