Estimating of The of Government Expenditure Multiplier and The Effects of Government Expenditure Shocks in Iran's Economy and Selected Countries

Mahnaz Hoseinpour () and Kambiz Hojabr Kiani ()
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Mahnaz Hoseinpour: Ph. D in Economics, Islamic Azad University, South Tehran Branch
Kambiz Hojabr Kiani: Professor of Economics, Islamic Azad University, Tehran Science and Research Branch

Quarterly Journal of Applied Theories of Economics, 2022, vol. 9, issue 1, 115-144

Abstract: The successful experiences of developed countries in applying fiscal policies to overcome the financial crisis of 2008 led to the fact that in developing countries considered impact of fiscal policy, also. Fiscal policy instruments (especially government expenditure) should attract the attention of policymakers and economic theorists in order to increase economic growth and exit the recession. The purpose of this study is to estimate of government expenditure Multiplier and to examine the effect of government expenditure shocks on GDP in Iran's economy and comparative comparisons with selected countries. In this regard, used for selected countries, the Panel Vector Auto Regression (PVAR) and Iran's economic Vector Auto Regression (VAR) model and computed the government expenditure Multiplier for each of them (in Iran (1985-2015) and selected countries (2000-2015)). The results show that a government expenditure shock in Iran and selected countries together initially increase of GDP and then a declining trend and moves in long run and the results of expenditure Multiplier confirming this. On the other hand, according to the results of the analysis of variance the high speed of the impact of government expenditure shocks on GDP is clearly visible

Keywords: Fiscal Policy; Fiscal Multiplier; Panel Vector Auto Regression model (PVAR); Vector Auto Regression model (VAR). Gross Domestic Production. (search for similar items in EconPapers)
JEL-codes: C01 E62 O40 (search for similar items in EconPapers)
Date: 2022
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