EconPapers    
Economics at your fingertips  
 

Asymmetric fiscal multipliers in India – Evidence from a non-linear cointegration

Javed Ahmad Bhat and Naresh Kumar Sharma

Macroeconomics and Finance in Emerging Market Economies, 2021, vol. 14, issue 2, 157-179

Abstract: We attempted to scrutinize the efficacy of fiscal policy tools on key macroeconomic variables in case of India. Applying an asymmetric cointegration framework, the impact of public spending hike on output growth is significantly favourable and that of the decrease in it is insignificant. Similarly, effect of tax hikes is more pronouncing than tax cuts. Comparatively, results report more effectiveness of spending hikes than the tax cuts to avoid an economic downturn and tax hikes than spending cuts to cool down a heating economy. Private consumption mimics response of output growth, whereas response of private investment follows the substitutability hypothesis.

Date: 2021
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/17520843.2020.1818802 (text/html)
Access to full text is restricted to subscribers.

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:taf:macfem:v:14:y:2021:i:2:p:157-179

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REME20

DOI: 10.1080/17520843.2020.1818802

Access Statistics for this article

Macroeconomics and Finance in Emerging Market Economies is currently edited by Subrata Sarkar and Ashima Goyal

More articles in Macroeconomics and Finance in Emerging Market Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2021-07-05
Handle: RePEc:taf:macfem:v:14:y:2021:i:2:p:157-179