Output effects of fiscal stimulus in Central and Eastern European Countries

Jean-Louis Combes, Alexandru Minea, Thierry Yogo () and Lavinia Mustea

MPRA Paper from University Library of Munich, Germany

Abstract: In spite of the rapidly growing research on fiscal multipliers over the recent years, little evidence has been so far accumulated in developing and emerging economies. This paper investigates the nature and the size of fiscal multipliers in Central and Eastern European Countries (CEEC). Unlike most of existing literature, we draw upon a panel vector error correction model, which appropriately captures the common long-term path of CEEC, while allowing for different short-run dynamics, in an integrated setup. Our main results show that the spending multiplier is positive, but low on average. Moreover, its sign,significance and magnitude vary across CEEC. Finally, both impulse and cumulative fiscal multipliers are sensitive to a wide range of CEEC characteristics, including the exchange rate regime, the level of economic development,the fiscal stance, and the openness degree.

Keywords: Central and Eastern European Countries; fiscal multipliers; panel vector error correction model (search for similar items in EconPapers)
JEL-codes: E6 O1 P35 (search for similar items in EconPapers)
Date: 2015-04-31, Revised 2015-05-31
New Economics Papers: this item is included in nep-mac and nep-tra
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Related works:
Journal Article: Output effects of fiscal stimulus in Central and Eastern European countries (2016)
Working Paper: Output effects of fiscal stimulus in Central and Eastern European countries (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:65623

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