Changing Impact of Fiscal Policy on Selected ASEAN Countries

Hsiao Chink Tang (), Philip Liu () and Eddie C. Cheung ()
Additional contact information
Hsiao Chink Tang: Asian Development Bank, Postal: 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Tel.: 632-632-5637, http://www.adb.org
Eddie C. Cheung: School of Arts and Social Sciences, Postal: Open University of Hong Kong, 30 Good Shepherd Street, Ho Man Tin, Kowloon, Hong Kong, China.

No 70, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: This paper investigates the effectiveness of fiscal policy in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. Through a structural vector autoregression (VAR) model, government spending is found to have weak and largely insignificant impact on output, while taxes are found to have outcomes contrary to conventional theory. Extensions using a time-varying VAR model reveal the impact of taxes on output mainly reflect heightened concerns over public finances amid the Asian financial crisis and the recent global financial crisis. On the other hand, for Singapore and Thailand, there is evidence that government spending can at times be useful as a tool for countercyclical policy.

Keywords: ASEAN; fiscal policy; structural VAR; time-varying VAR (search for similar items in EconPapers)
JEL-codes: C11 E62 H20 H30 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2010-12-01
New Economics Papers: this item is included in nep-pbe and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Journal Article: Changing impact of fiscal policy on selected ASEAN countries (2013)
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