Effectiveness of the Australian Fiscal Stimulus Package: A DSGE Analysis

Shuyun May Li and Adam Spencer ()

No 1184, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: We develop and estimate a small open economy DSGE model to investigate the effectiveness of the Australian fiscal stimulus package introduced in the aftermath of the global financial crisis (GFC). The timing and magnitudes of GFC shocks, fiscal shocks that mimic the stimulus transfers, and accommodative monetary policy shocks are carefully calibrated and fed into various simulation experiments. The results suggest that the stimulus transfers were effective in combating the economic downturn caused by the GFC, however, the scale of the transfer initiative seems to be excessive.

Keywords: Australian fiscal stimulus; DSGE; Global financial crisis; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: E32 E62 E65 F41 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014
New Economics Papers: this item is included in nep-dge, nep-ger and nep-mac
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Journal Article: Effectiveness of the Australian Fiscal Stimulus Package: A DSGE Analysis (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:1184

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