Empirical evidence on the stabilizing role of fiscal and monetary policies in the US

Manuel Pereira

MPRA Paper from University Library of Munich, Germany

Abstract: I apply SVAR tools and counterfactual simulation techniques to study the (de)stabilizing role of monetary and fiscal policies in the US, using quarterly data from 1955 to 2005. Monetary and fiscal disturbances contributed much less to output volatility in the second part of the sample. This result stems from their smaller impact and, to a lesser extent, from a decline in the respective variance. Systematic taxes net of transfers were the most important stabilizing force in the course of postwar recessions until the eighties. Monetary policy had a comparatively smaller role in offsetting the downturns in activity at those episodes. Net taxes have, however, suffered a marked lost of effectiveness in recent decades.

Keywords: fiscal policy; monetary policy; stabilization; structural vector autoregression (search for similar items in EconPapers)
JEL-codes: E52 E62 E63 (search for similar items in EconPapers)
Date: 2008-09, Revised 2009-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/17474/1/MPRA_paper_17474.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/19675/1/MPRA_paper_19675.pdf revised version (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: https://EconPapers.repec.org/RePEc:pra:mprapa:17474

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().