We estimate non-linear VARs to assess to what extent fiscal spending multipliers are countercyclical in the US. We deal with the issue of non-fundamentalness due to fiscal foresight by appealing to sums of revisions of expectations of fiscal expenditures. This measure of anticipated fiscal shocks is shown to carry valuable information about future dynamics of public spending. Results based on generalised impulse responses suggest that fiscal spending multipliers in recessions are greater than one, but not statistically larger than those in expansions. However, non-linearities arise when focusing on 'extreme' events, that is, deep recessions versus strong expansionary periods.

Caggiano, G., Castelnuovo, E., Colombo, V., Nodari, G., Estimating Fiscal Multipliers: News From A Non-linear World, <<ECONOMIC JOURNAL>>, 2015; 125 (584): 746-776. [doi:10.1111/ecoj.12263] [http://hdl.handle.net/10807/178889]

Estimating Fiscal Multipliers: News From A Non-linear World

Colombo, V.;
2015

Abstract

We estimate non-linear VARs to assess to what extent fiscal spending multipliers are countercyclical in the US. We deal with the issue of non-fundamentalness due to fiscal foresight by appealing to sums of revisions of expectations of fiscal expenditures. This measure of anticipated fiscal shocks is shown to carry valuable information about future dynamics of public spending. Results based on generalised impulse responses suggest that fiscal spending multipliers in recessions are greater than one, but not statistically larger than those in expansions. However, non-linearities arise when focusing on 'extreme' events, that is, deep recessions versus strong expansionary periods.
2015
Inglese
Caggiano, G., Castelnuovo, E., Colombo, V., Nodari, G., Estimating Fiscal Multipliers: News From A Non-linear World, <<ECONOMIC JOURNAL>>, 2015; 125 (584): 746-776. [doi:10.1111/ecoj.12263] [http://hdl.handle.net/10807/178889]
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/178889
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 105
  • ???jsp.display-item.citation.isi??? 102
social impact