The effects of fiscal expansions: an international comparison

Evi Pappa

No 409, Working Papers from Barcelona School of Economics

Abstract: We compare the transmission of fiscal shocks in four OECD countries and in the Euro area. Fiscal shocks are identified in a SVAR by the restrictions that disturbances to government consumption, government investment and government employment increase output and deficits contemporaneously. These restrictions hold in both prototype RBC and New-Keynesian models. All spending shocks increase private consumption and employment, while the responses of private investment and the real wage are mixed. The output effects of government consumption and investment shocks are smaller than those of government employment shocks for all countries and all samples. The transmission of fiscal shocks has changed features over time.

Keywords: stability; fiscal policy shocks; SVARs; sign restrictions (search for similar items in EconPapers)
JEL-codes: C11 E12 E32 E62 H30 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/2023/10/1409-file.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:409

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar (bruno.guallar@bse.eu).