EFZG working paper series, No. 06, 2013.
Ostalo
Empirical assessment of stabilization effects of fiscal policy in Croatia
Ana Grdović Gnip
orcid.org/0000-0003-4995-5046
; Juraj Dobrila University of Pula Faculty of Economics & Tourism “Dr. Mijo Mirković” and Faculty of Economics, University of Ljubljana
Sažetak
The aim of this paper is to assess the stabilization effects of fiscal policy in Croatia in a structural vector autoregression framework as proposed by Blanchard and Perotti (2002). Empirical studies of fiscal policy effects show that results are contradictory and do not unanimously agree, except for one fact: a positive government spending shock has a positive effect on output. This study inspects the effects of government spending and tax shocks on a set of macroeconomic variables (output, prices, interest rates, private consumption, private investment, employment and wages). Results prove that the fiscal transmission mechanism in Croatia works mainly in a Keynesian manner. Output reacts negatively to a tax shock and positively to government spending shock. The output multiplier is above 2 at impact and the effect is significant throught the whole time span. The negative effect of the tax shock is mostly driven by indirect (not direct) taxes, while the positive effect of a government spending shock is influenced by government consumption and government investment, but the effect of the latter is more significant when private consumption and private investment responses are observed.
Ključne riječi
fiscal policy; fiscal multiplier; spending shock; tax shock; SVAR; Croatia
Hrčak ID:
136790
URI
Datum izdavanja:
13.11.2013.
Posjeta: 993 *