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- W3123801916 abstract "We study the effect of regional expenditure and revenue shocks on price differentials for 47 US states and 9 EU countries. We identify shocks using sign restrictions on the dynamics of deficits and output and construct two estimates for structural price differentials dynamics which optimally weight the information contained in the data for all units. Fiscal shocks explain between 14 and 23 percent of the variability of price differentials both in the US and in the EU. On average, expansionary fiscal disturbances produce positive price differential responses while distortionary balance budget shocks produce negative price differential responses. In a number of units, price differential responses to expansionary fiscal shocks are negative. Spillovers and labor supply effects partially explain this pattern while geographical, political, and economic indicators do not." @default.
- W3123801916 created "2021-02-01" @default.
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- W3123801916 date "2005-06-01" @default.
- W3123801916 modified "2023-09-23" @default.
- W3123801916 title "Price differentials in monetary unions: The role of fiscal shocks" @default.
- W3123801916 hasPublicationYear "2005" @default.
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