Multipliers of taxes and public spending in Colombia: SVAR and local projections approaches

Sergio Restrepo-Ángel, Hernan Rincon-Castro and Juan Ospina-Tejeiro

Latin American Journal of Central Banking (previously Monetaria), 2022, vol. 3, issue 3

Abstract: This paper estimates and analyzes multipliers for tax revenue and public spending for Colombia using structural autoregressive vectors and local projections models. Quarterly series of the central national government between 2000Q1 and 2018Q4 are used. The results show fiscal multipliers that are less than unity when the state of the economy is not considered and a spending multiplier around unity when the economy is in an expansionary phase. The spending multiplier is greater and bigger than one during a contractionary phase, supporting the case for conducting countercyclical fiscal policy in this state. The tax revenue multiplier is negative and much smaller in magnitude than the spending multiplier. The results are robust to different identification schemes and estimation methodologies.

Keywords: Fiscal shocks; Blanchard and Perotti; Standard and smooth local projections; Fiscal multipliers (search for similar items in EconPapers)
JEL-codes: C32 C51 C53 E62 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2666143822000242
Gold Open Access

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:eee:lajcba:v:3:y:2022:i:3:s2666143822000242

DOI: 10.1016/j.latcb.2022.100070

Access Statistics for this article

Latin American Journal of Central Banking (previously Monetaria) is currently edited by Manuel Ramos-Francia

More articles in Latin American Journal of Central Banking (previously Monetaria) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().