Clausen, Volker:
Haushaltskonsolidierung und Wechselkurs. (Fiscal Consolidation and Exchange Rates. With English summary.)
1995
In: Konjunkturpolitik, Band 41 (1995), S. 95 - 114
Artikel/Aufsatz in Zeitschrift / Fach: Wirtschaftswissenschaften
Titel:
Haushaltskonsolidierung und Wechselkurs. (Fiscal Consolidation and Exchange Rates. With English summary.)
Autor(in):
Clausen, Volker im Online-Personal- und -Vorlesungsverzeichnis LSF anzeigen
Erscheinungsjahr
1995
Erschienen in:
Konjunkturpolitik, Band 41 (1995), S. 95 - 114
ISSN
WWW URL

Abstract:

The paper analyzes the implications of fiscal consolidation efforts for the real external exchange rate. In the model following Dornbusch (1976) augmented by an equation reflecting the evolution of government spending, it is shown that the fluctuations of the real external exchange rate will be the smaller, the more decisively policy makers reduce public deficits. On the other hand, all other macroeconomic variables exhibit more short-term variability. In the decision about the speed of fiscal consolidation, policy makers face a short-term tradeoff between real exchange rate and other macroeconomic stability.