Fiscal policy and the real exchange ratesome evidence from Spain

  1. Óscar Bajo Rubio 1
  2. Burku Berke 2
  3. Vicente Esteve 3
  1. 1 Universidad de Castilla-La Mancha
    info
    Universidad de Castilla-La Mancha

    Ciudad Real, España

    ROR https://ror.org/05r78ng12

    Geographic location of the organization Universidad de Castilla-La Mancha
  2. 2 Nigde Omer Halisdemir University
  3. 3 Universitat de València
    info
    Universitat de València

    Valencia, España

    ROR https://ror.org/043nxc105

    Geographic location of the organization Universitat de València
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Journal:
Documentos de Trabajo (IAES, Instituto Universitario de Análisis Económico y Social)

ISSN: 1139-6148

Year of publication: 2018

Issue: 7

Pages: 1-24

Type: Working paper

DIALNET GOOGLE SCHOLAR HANDLE: https://hdl.handle.net/10017/35519

More publications in: Documentos de Trabajo (IAES, Instituto Universitario de Análisis Económico y Social)

Abstract

The factors influencing the real exchange rate are an important issue for a country’s price competitiveness, which is especially relevant to those countries belonging to a monetary union. In this paper, we analyse the relationship between fiscal policy and the real exchange rate for the case of Spain. In particular, we explore how changes in government spending, differentiating between consumption and investment, can affect the long-run evolution of the real exchange rate vis-à-vis the euro area. The distinction between two alternative definitions of the real exchange rate, based on consumption price indices and export prices, respectively, will also prove to be relevant for the results.

Data source: Dialnet