Economics at your fingertips  

Dynamic Effects of Fiscal Policy in Japan: Evidence from a Structural VAR with Sign Restrictions

Kensuke Miyazawa and Kengo Nutahara

No 13-006E, CIGS Working Paper Series from The Canon Institute for Global Studies

Abstract: In this paper, we employ structural vector autoregression (VAR) with sign restrictions to identify the dynamic effects of fiscal policy shocks in Japan. We find that (i) an increase in government spending has positive effects on consumption and wages in the short run, but these effects are not persistent, and the effects on GDP are almost zero. We also find, surprisingly, that (ii) an increase in government revenue has significant positive effects on GDP, consumption, and investment in the medium and long run although it has negative effects in the short run. Finally, (iii) the balanced-budget spending policy scenario is better than deficit-spending and deficit-financed tax-cut policy scenarios.

Pages: 25
Date: 2013-11
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this paper

More papers in CIGS Working Paper Series from The Canon Institute for Global Studies Contact information at EDIRC.
Bibliographic data for series maintained by The Canon Institute for Global Studies ().

Page updated 2020-09-14
Handle: RePEc:cnn:wpaper:13-006e