Asymmetric Effects of Fiscal Policy in EU and OECD Countries
Keywords:
fiscal policy,
fiscal multiplier,
government spending,
fiscal stance/behaviour,
EU,
OECD
Author(s):
- Dr. Jernej Mencinger, University of Ljubljana Faculty of Administration;
- Dr. Aleksander Aristovnik, University of LjubljanaFaculty of Administration;
- Dr. Miroslav Verbič, University of Ljubljana Faculty of Economics
Abstract:
In this article, we take account of an evaluation of the short- and medium-term effects of the transmission mechanism of fiscal policy in EU and OECD countries and their dependence on the state of the economy and fiscal behaviour. Our findings indicate that (i) across EU member states the impact of government spending on economic performance is larger in the accession than in core member states, (ii) since the onset of the economic/financial crisis the government spending multipliers have become larger in both core and accession EU member states, and (iii) a comparison with fiscal responses in the OECD countries shows robustness of our estimates. The conclusion implies that the austerity measures present a substantial drag for economic activity in accession EU countries. Thus, we may state that not considering the fiscal behaviour and state of the economy gives misleading fiscal multiplier effects, which in turn lead to the adoption of inappropriate fiscal measures that even worsen a country’s economic situation.
Journal:
Economic Modelling, 61 (2017), str. 448–461
Indexing:
JCR SSCI 2015 IF 0.997
Related news
Publish your comment:
Upcoming events
