engleski

Empirical assessment of stabilization effects of fiscal policy in Croatia

The aim of this paper is to assess the stabilization effects of fiscal policy in Croatia in a structural vector autoregression framework as proposed by Blanchard and Perotti (2002). Results prove that the fiscal transmission mechanism in Croatia works mainly in a Keynesian manner. Output reacts negatively to a tax shock and positively to government spending shock. The output multiplier is above 2 at impact and the effect is significant throught the whole time span. The negative effect of the tax shock is mostly driven by indirect (not direct) taxes. The positive effect of government spending is more pronounced when government investment is considered, especially when private consumption and private investment responses are observed.

fiscal multiplier ; spending shock ; tax shock ; SVAR ; Croatia

nije evidentirano