UID:
edocfu_9958080735802883
Format:
1 online resource (52 p.)
ISBN:
1-4843-9235-3
,
1-4843-0622-8
,
1-4843-6322-1
Series Statement:
IMF working paper ; 13/136
Content:
The past several years of recession and slow recovery have raised much interest on the effect of fiscal stimulus on economic activity, even as high public debts in many countries would call for fiscal consolidation. To evaluate the delicate balance between stimulus and consolidation requires measuring the size of fiscal multipliers, which often depends on having quarterly data so that exogenous fiscal policy shocks can be identified. We estimate fiscal multipliers using a novel methodology for identifying fiscal shocks within a structural vector autoregressive approach using annual data while controling for debt feedback effects. The estimation focuses on regions with scarce quarterly data (mostly low-income countries), and uses results for advanced economies, emerging market countries, and other broad groupings for which alternative estimates are available to validate the methodology. Differently from advanced and emerging market economies, fiscal consolidation in low-income countries has only a small temporary negative effect on growth while raising medium-term output. Shifting the composition of public spending toward capital expenditure further supports long-run growth.
Note:
Description based upon print version of record.
,
Cover; Contents; I. Introduction; II. Past Attempts to Identify Discretionary Fiscal Policy Changes; III. Identifying Fiscal Policy Shocks with Debt Feedback and Annual Data; IV. Estimation Results; A. Fiscal Policy in Central America as a case study; Figures; 1. Central America and Regional Peers: Selected Economic Indicators; B. Empirical Modeling Approach; C. Overall Results; D. Spending Multipliers; E. Tax Multipliers; F. Capital and Current Spending Multipliers
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2. Real GDP Growth Effects of a One-Percentage-Point Increase in Expenditure or Cut in Tax Revenue-A SVECM Approach with Debt Feedback (Impact)3. Real GDP Growth Effects of a One-Percentage-Point Increase in Expenditure or Cut in Tax Revenue - A Structural VAR Approach with Debt Feedback (Cumulative); 4. Impact and Cumulative Output Multipliers of Capital and Current Expenditures - A Structural VAR Approach with Debt Feedback; Tables; 1. Cumulative Output Multipliers with Debt Feedback and Financial Constraints: Current and Capital Expenditure; V. Concluding Remarks; 2a. Country Group
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AppendixI. Country Grouping; 2b. Country Group; 2c. Country Group; 3. Optimal Lag Length; 4. Cointegration Equations of Revenue; 5. Cumulative Output Multipliers with Debt Feedback and Financial Constraints: Expenditure and Tax Shocks; 6. Summary of Selected Results of Fiscal Multipliers from Literature; 5. Costa Rica: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation); 6. Dominican Republic: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation)
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7. El Salvador: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation)8. Guatemala: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation); 9. Honduras: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation); 10. Nicaragua: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation)
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11. Panama: Estimated Impact of Fiscal Consolidation of 1% of GDP on GDP Growth (Accumulated Responses, 1-Standard Deviation)12. VAR-Normality test; References
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English
Additional Edition:
ISBN 1-4843-0448-9
Additional Edition:
ISBN 1-299-67841-6
Language:
English
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