International spillovers from U.S. fiscal policy shocks

Stephen Nicar

MPRA Paper from University Library of Munich, Germany

Abstract: I estimate the effect of U.S. government spending and tax shocks on Canada, Japan, and the U.K. for the period 1974 through 2007. Spending and tax shocks are identified using sign restrictions on the impulse responses from a vector autoregression (VAR). I find that while spillover effects of expansionary fiscal shocks are not uniform in direction or magnitude across countries, for Canada and Japan they result in economically significant GDP increases over some portion of the response horizon. For all three countries, government spending shocks generally have larger effects than net tax shocks. Altogether, the results support the idea that some countries may benefit significantly from expansionary U.S. fiscal policy.

Keywords: Fiscal policy; International Transmission; Spillovers; VAR models; Sign Restriction (search for similar items in EconPapers)
JEL-codes: C32 E62 F42 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (5)

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https://mpra.ub.uni-muenchen.de/64332/1/MPRA_paper_63214.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/64332/12/MPRA_paper_64332.pdf revised version (application/pdf)

Related works:
Journal Article: International Spillovers from U.S. Fiscal Policy Shocks (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63214

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