engleski

Fiscal multiplier determinants in the CESEE region

In this paper we use a panel VAR model with exogenous variables to analyze the effects of various structural characteristics of the economies on the effectiveness of government consumption in Central Eastern and Southeastern European region (CESEE). More precisely, we analyze the effects of government consumption on economic growth in this region, controlling for the effects of the size of the economy, level of public debt, level of tax burden, openness of the economy, rigidity of the labor market, monetary regime and the phase of the business cycle. Our results indicate that these characteristics have a significant impact on the effectiveness of fiscal policy (in terms of the size of fiscal multiplier). Also, these effects are in line with the theoretical assumptions as recessionary phase of the cycle, size of the economy, rigidity of the labor market and fixed exchange rate regime increase the average size of fiscal multipliers while tax burden, indebtedness and openness of the economies reduce the size of fiscal multiplier, when compared to the base model.

fiscal multipliers ; CESEE region ; panel VAR

Znanstveni rezultati rada su prezentirani na skupu International Scientific Conference “Mechanisms of financial system stability in an unstable environment”, održanom 21.11.2016.g., na Ekonomskoj školi, Varšava, Poljska.