TY - BOOK ID - 11267400 TI - The International Effects of Government Spending Composition AU - Ganelli, Giovanni. AU - International Monetary Fund. PY - 2005 SN - 1451860234 1462339751 1451905599 9786613797469 1452781451 128204432X PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Civil service -- Econometric models. KW - Fiscal policy -- Econometric models. KW - Government spending policy -- Econometric models. KW - Political Science KW - Law, Politics & Government KW - Public Finance KW - Government spending policy KW - Civil service KW - Fiscal policy KW - Econometric models. KW - Tax policy KW - Taxation KW - Bureaucrats KW - Career government service KW - Civil servants KW - Government employees KW - Government service KW - Public employees KW - Public service (Civil service) KW - Expenditures, Public KW - Public spending policy KW - Spending policy, Government KW - Government policy KW - Law and legislation KW - Legal status, laws, etc. KW - Economic policy KW - Finance, Public KW - Public administration KW - Public officers KW - Public service employment KW - Full employment policies KW - Unfunded mandates KW - Labor KW - Macroeconomics KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Employment KW - Unemployment KW - Wages KW - Intergenerational Income Distribution KW - Aggregate Human Capital KW - Aggregate Labor Productivity KW - National Government Expenditures and Related Policies: General KW - Labour KW - income economics KW - Public finance & taxation KW - Public employment KW - Consumption KW - Expenditure KW - Government consumption KW - Private consumption KW - Economics KW - Economic theory KW - Income economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:11267400 AB - This paper helps resolve a paradox in the literature, noticed by Alesina and Perotti (1995), which is that, although government employment is an important component of public spending, the debate on the effects of fiscal policy focuses almost exclusively on shocks to non-wage government consumption. We incorporate the distinction between spending for government employment and spending for non-wage government consumption in a "new open economy macroeconomics" model. Our results show that a permanent reduction in public employment in one country reduces relative private consumption and appreciates the domestic exchange rate if it is matched by a reduction in taxes. When the reduction in public employment is used to finance increased non-wage government consumption, the macroeconomic effects results are ambiguous, and are affected by the initial level of the public wage bill. ER -