The power of fiscal multipliers in Croatia
This paper investigates fiscal multipliers in Croatia in the period 1996Q1-2011Q4. For this purpose, a Blanchard Perotti three variable baseline SVAR is employed as a no regime-switch model, along with a four variable baseline STVAR as a regime-switch model. Results show that during recessions fisca...
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| Format: | Article |
| Language: | English |
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Institute of Public Finance
2014-06-01
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| Series: | Financial Theory and Practice |
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| Online Access: |
http://fintp.ijf.hr/upload/files/ftp/2014/2/grdovic_gnip.pdf
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| _version_ | 1818790742756163584 |
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| author | Ana Grdović Gnip |
| author_facet | Ana Grdović Gnip |
| author_sort | Ana Grdović Gnip |
| collection | DOAJ |
| description | This paper investigates fiscal multipliers in Croatia in the period 1996Q1-2011Q4. For this purpose, a Blanchard Perotti three variable baseline SVAR is employed as a no regime-switch model, along with a four variable baseline STVAR as a regime-switch model. Results show that during recessions fiscal multipliers in Croatia tend to be much larger and move in line with Keynesian assumptions, i.e. a positive government spending shock increases output, private consumption and private investment, while oppositely a positive tax shock worsens the same macroeconomic variables. Moreover, during recession times government spending for purchases of goods and services seems to be the most effective fiscal instrument for boosting economic activity. |
| first_indexed | 2024-12-18T15:00:18Z |
| format | Article |
| id | doaj.art-be5e3341b11b4b1085bd7d76d8fa3cd9 |
| institution | Directory Open Access Journal |
| issn | 1845-9757 |
| language | English |
| last_indexed | 2024-12-18T15:00:18Z |
| publishDate | 2014-06-01 |
| publisher | Institute of Public Finance |
| record_format | Article |
| series | Financial Theory and Practice |
| spelling | doaj.art-be5e3341b11b4b1085bd7d76d8fa3cd92022-12-21T21:03:55ZengInstitute of Public FinanceFinancial Theory and Practice1845-97572014-06-0138217321910.3326/fintp.38.2.3762The power of fiscal multipliers in CroatiaAna Grdović Gnip0 Juraj Dobrila University of Pula, Dr. Mijo Mirković Faculty of Economics and Tourism, Pula, Croatia This paper investigates fiscal multipliers in Croatia in the period 1996Q1-2011Q4. For this purpose, a Blanchard Perotti three variable baseline SVAR is employed as a no regime-switch model, along with a four variable baseline STVAR as a regime-switch model. Results show that during recessions fiscal multipliers in Croatia tend to be much larger and move in line with Keynesian assumptions, i.e. a positive government spending shock increases output, private consumption and private investment, while oppositely a positive tax shock worsens the same macroeconomic variables. Moreover, during recession times government spending for purchases of goods and services seems to be the most effective fiscal instrument for boosting economic activity. http://fintp.ijf.hr/upload/files/ftp/2014/2/grdovic_gnip.pdf fiscal multiplier; spending shock; tax shock; SVAR; STVAR; Croatia |
| spellingShingle | Ana Grdović Gnip The power of fiscal multipliers in Croatia Financial Theory and Practice fiscal multiplier; spending shock; tax shock; SVAR; STVAR; Croatia |
| title | The power of fiscal multipliers in Croatia |
| title_full | The power of fiscal multipliers in Croatia |
| title_fullStr | The power of fiscal multipliers in Croatia |
| title_full_unstemmed | The power of fiscal multipliers in Croatia |
| title_short | The power of fiscal multipliers in Croatia |
| title_sort | power of fiscal multipliers in croatia |
| topic | fiscal multiplier; spending shock; tax shock; SVAR; STVAR; Croatia |
| url |
http://fintp.ijf.hr/upload/files/ftp/2014/2/grdovic_gnip.pdf
|
| work_keys_str_mv | AT anagrdovi263gnip thepoweroffiscalmultipliersincroatia AT anagrdovi263gnip poweroffiscalmultipliersincroatia |