The Effect of Fiscal Policy on Output in Times of Crisis and Prosperity: Historical Evidence From Greece
Tadeusz Gwiazdowski and
Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester
Empirical analysis of a unique and unexplored historical dataset for Greece provides new insight into the state and regime dependence of the government spending multiplier. Greece fought numerous wars between the establishment of the modern Greek state and the outbreak of World War II. Using data for both armament and disarmament, and controlling for states and regimes in the economy, our empirical findings suggest that the exchange rate regime, the presence of exchange controls, and the business cycle all have a significant impact on the size of the government spending multiplier. However, analysing the interaction of these states and regimes turns out to be crucial to removing the bias from our multiplier estimates. In particular, regardless of other states and regimes in the economy, the multiplier is estimated to be zero during good times. In contrast, it is well above unity when spending decreases in a recession.
Pages: 31 pages
New Economics Papers: this item is included in nep-his and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://hummedia.manchester.ac.uk/schools/soss/cgbc ... apers/dpcgbcr230.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:230
Access Statistics for this paper
More papers in Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Marianne Sensier ().