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On the size of fiscal multipliers: A counterfactual analysis

Jan Kuckuck and Frank Westermann

Economics Letters, 2014, vol. 123, issue 1, pages 26-32

Abstract: We point out that fiscal multipliers derived from SVAR-models include the predicted future path of policy instruments. After the initial shock, net taxes and government expenditures react to each other and are autocorrelated. In a counterfactual simulation, we report fiscal multipliers that abstract from these dynamic responses.

Keywords: Fiscal policy; Government spending; Net revenues; Structural vector autoregression (search for similar items in EconPapers)
JEL-codes: E62 H20 H50 (search for similar items in EconPapers)
Date: 2014
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Working Paper: On the Size of Fiscal Multipliers: A Counterfactual Analysis (2013) Downloads
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