We identify fiscal impulses in the EU New Member States using four different methods and apply econometric panel data techniques to determine what is the response of output and its components to those impulses. We also directly test the effects of fiscal impulses on labor costs and households’ expectations. The results confirm that the composition of impulses matters for output and its components response. Notably we find evidence that investment and export growth accelerates after fiscal adjustment and decelerates after fiscal stimulus when the impulses are expenditure based. In turn, private consumption seems not to respond to fiscal impulses regardless of their size. The analysis confirms that expenditure based fiscal adjustments enhance wage moderation and thereby competitiveness of domestic enterprises, while expenditure-based fiscal stimuli weaken it. By contrast, we do not find evidence that fiscal impulses have an effect on households’ confidence.

/pdf/panel-data-evidence-on-effects-of-fiscal-impulses-in-the-eu-1xuxdrvee9.pdf

Fiscal Policy in IS-LM Analysis: A Correction

Panel data evidence on effects of fiscal impulses in the EU New Member States

On the efficacy of certain fiscal policies — a reformulation

Asset stocks and flows in macroeconomic theory

There is growing evidence that fiscal consolidation may contribute to economic growth even in the short term. In this paper we review recent research on such non-Keynesian fiscal policy effects and apply panel data econometric techniques to examine the consequences of fiscal consolidation in the EU New Member States. We extend the analysis to test potential channels through which non-Keynesian effects may operate. The results confirm that composition of the consolidation determines the output response. Moreover, we find evidence that all types of fiscal consolidations stimulate private investments, while export acceleration is observed only when consolidations involve mostly expenditure curtailment. Private consumption reaction to fiscal policy shows signs of nonlinearity - in the case of minor adjustments Keynesian effects dominate, but they are cancelled out when sizable consolidations are considered.

https://mpra.ub.uni-muenchen.de/32696/1/MPRA_paper_32696.pdf

Fiscal Policy in IS-LM Analysis: A Correction

Citations

Panel data evidence on effects of fiscal impulses in the EU New Member States

On the efficacy of certain fiscal policies — a reformulation

Asset stocks and flows in macroeconomic theory

Panel data evidence on non-Keynesian efects of fiscal policy in the EU New Member

Fiscal policy in a perfect‐foresight model with “useful” government expenditure*

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