Fiscal Policy, Net Exports, and the Sectoral Composition of Output in Greece

38 Pages Posted: 18 Aug 2022

Date Written: September 1, 2014

Abstract

This paper investigates the effects of fiscal policy shocks on net export performance and the sectoral composition of output in Greece in the post 2000 period. A reduction in government spending (or a tax hike) exerts a negative response on output which reduces import demand. A cut back in government spending boosts exports through the labour cost competitiveness channel further improving net exports. Tax hikes in particular on social security contributions and other indirect taxes reduce export performance. Although real aggregate output declines following a cut in government spending, the tradable sector output responds positively, further improving net exports.

Keywords: Fiscal policy; net exports; tradable; non-tradable

JEL Classification: E62, E24, O52, H30

Suggested Citation

Tagkalakis, Athanasios, Fiscal Policy, Net Exports, and the Sectoral Composition of Output in Greece (September 1, 2014). Bank of Greece Working Paper No. 186, Available at SSRN: https://ssrn.com/abstract=4184658 or http://dx.doi.org/10.2139/ssrn.4184658

Athanasios Tagkalakis (Contact Author)

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece

University of Patras

Patra
Greece

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
472
PlumX Metrics