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HOME BIAS IN GOVERNMENT SPENDING AND QUASI NEUTRALITY OF FISCAL SHOCKS

Published online by Cambridge University Press:  28 April 2005

GIOVANNI GANELLI
GIOVANNI GANELLI
Affiliation:
International Monetary Fund
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Abstract

We show how introducing home bias in government spending in the redux model generates quasi neutrality of fiscal policy shocks. We offer an intuitive explanation for this result and we stress its policy implications.

Keywords

New Open Economy MacroeconomicsFiscal PolicyQuasi Neutrality
Type
NOTES
Information
Macroeconomic Dynamics , Volume 9 , Issue 2 , April 2005 , pp. 288 - 294
Copyright
© 2005 Cambridge University Press

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