Resource title

Fiscal policy and business cycles: an empirical investigation

Resource image

image for OpenScout resource :: Fiscal policy and business cycles: an empirical investigation

Resource description

This paper presents an empirical study of the effects of fiscal policy. The authors analyse the importance of automatic stabilizers as well as the dynamic effects of discretionary fiscal policy. They present strong evidence in favor of the hypothesis that large governments reduce the volatility of output (total or private). The result is robust to the introduction of controls and the adjustment for possible endogeneity problems. In the second part of the paper they review different methods of identification of discretionary fiscal policy shocks. They find strong and persistent effects of changes in fiscal policy on economic activity.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2000/2000-77.pdf

Resource license

Copyright INSEAD. All rights reserved