Erceg, Christopher J.; Guerrieri, Luca; Gust, Christopher - Federal Reserve Board (Board of Governors of the … - 2005
trade balance in the United States. We examine the effects of two alternative fiscal shocks: a rise in government … effect on the U.S. trade balance, irrespective of whether the source is a spending increase or tax cut. In our benchmark … calibration, we find that a rise in the fiscal deficit of one percentage point of GDP induces the trade balance to deteriorate by …