Fiscal Stimulus Effectiveness in Japan: Evidence from Recent Policies

This paper examines the effects of Japanese fiscal policy after the 2008 global financial crisis using a mixed vector autoregression/event study approach. We focus on the effects of stimulus packages with environmental benefits. The empirical results show that a tax break and subsidy program designed to promote the adoption of eco-friendly cars helped stimulate automobile production, while a similar program intended to promote the purchase of energy-efficient appliances had no effect on appliance production.