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Essays In Fiscal Policy And State Dependence Fiscal Policy Innovations Using A New Econometric Approach

Kwabena Meneabe Nkrumah
Authors registered in the RePEc Author Service: Kwabena Meneabe Ackon

MPRA Paper from University Library of Munich, Germany

Abstract: Unparalleled is a word that best describes the current state of advanced economies. Interest rates are low in many advanced countries and negative in a few others suggesting that monetary policy has lost its effectiveness. The economic policy tool that has not been implemented yet by many advanced economies is fiscal policy. This thesis studies the effect of fiscal policy in USA, UK and Germany and find positive effects of extra government purchases on output, inflation, private consumption, business investment, wages and hours worked. As a contribution to the academic literature on fiscal policy, this thesis estimates the impact of automatic stabilisers on economic activity and finds it holds predictive content for the path of output and inflation with both showing a positive response. Furthermore, this thesis adds to the literature on state-dependence fiscal policy by using a novel econometric approach to study the effect of expansionary fiscal policy during recessions.

Keywords: Fiscal Policy; Government; Investment; Econometrics; state dependence fiscal policy; economic policy; Business Investment; wages; Gross Domestic Product; Consumption; IS-LM; Inflation Dynamics; USA; UK and Germany (search for similar items in EconPapers)
JEL-codes: A2 A20 C1 C13 C8 E1 E12 E2 E21 E22 E24 E3 E4 E5 E6 F1 H1 H2 H3 H4 H5 H6 H7 (search for similar items in EconPapers)
Date: 2018
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