On the size of fiscal multipliers: A counterfactual analysis

We point out that fiscal multipliers derived from SVAR-models include the predicted future path of policy instruments. After the initial shock, net taxes and government expenditures react to each other and are autocorrelated. In a counterfactual simulation, we report fiscal multipliers that abstract from these dynamic responses.

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Year of publication:	2014
Authors:	Kuckuck, Jan ; Westermann, Frank
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 123.2014, 1, p. 26-32
Publisher:	Elsevier
Subject:	Fiscal policy \| Government spending \| Net revenues \| Structural vector autoregression

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Type of publication:	Article
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; H20 - Taxation, Subsidies, and Revenue. General ; H50 - National Government Expenditures and Related Policies. General
Source:	RePEc - Research Papers in Economics

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