The output effects of systematic and non-systematic fiscal policy changes in Greece

Athanasios Tagkalakis

No 167, Working Papers from Bank of Greece

Abstract: This paper investigates the effects of systematic (or rules-based) and non-systematic (exogenous) fiscal policy changes on output growth in Greece, focusing also on the composition of fiscal policy. Exogenous fiscal policy changes are associated with Keynesian responses (with the exception of net transfers and VAT). Although systematic government spending cuts aiming at improving fiscal performance tend to have a Keynesian effect on output growth in the short term, they ultimately result in a non-Keynesian response, raising output growth. Systematic direct tax hikes, aiming at correcting fiscal imbalances, can have positive medium to long term growth effects.

Keywords: Fiscal rules; output growth; exogenous; systematic policy responses (search for similar items in EconPapers)
JEL-codes: E6 H3 H6 (search for similar items in EconPapers)
Pages: 36
Date: 2013-11
New Economics Papers: this item is included in nep-mac and nep-pbe
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Journal Article: The output effects of systematic and non-systematic fiscal policy changes in Greece (2013)
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