EconStor >
Deutsche Bundesbank, Forschungszentrum, Frankfurt am Main >
Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/19701
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorvon Kalckreuth, Ulfen_US
dc.contributor.authorWolff, Guntram B.en_US
dc.date.accessioned2009-01-28T16:02:06Z-
dc.date.available2009-01-28T16:02:06Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/19701-
dc.description.abstractWe propose a method for indentifying discretionary fiscal policy with real time data. The starting point is the observation that automatic stabilizers should depend on true GDP, while discretionary fiscal policy depends on the information that policy makers have in real time. We approximate the information set of policy makers with GDP data released in real time. True GDP is approximated using the last GDP release. Accordingly, we can compute a real time measurement error. Discretionary fiscal policy can be expected to react to this measurement error, whereas automatic fiscal policy will not. We apply this identification approach in order to test the central identifying assumption of Blanchard and Perotti's (2002) seminal structural VAR. According to this assumption, fiscal policy makers do not react to GDP evolutions contemporaneously in a discretionary fashion. We find that government expenditure is adjusted upward if GDP in real time is lower than true GDP. This suggests that fiscal policy makers can use short-term funds to buy goods and services in response to GDP updates. Our results therefore call the identifying assumption of Blanchard and Perotti's (2002) SVAR into question.en_US
dc.language.isoengen_US
dc.relation.ispartofseriesDiscussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2007,24en_US
dc.subject.jelE62en_US
dc.subject.jelH30en_US
dc.subject.ddc330en_US
dc.subject.keyworddiscretionary fiscal policyen_US
dc.subject.keywordreal-time dataen_US
dc.subject.keywordgovernment spendingen_US
dc.subject.keywordstructural vector autoregressionen_US
dc.subject.stwFinanzpolitiken_US
dc.subject.stwDiskretionäre Politiken_US
dc.subject.stwKonjunkturpolitiken_US
dc.subject.stwKonjunkturstatistiken_US
dc.subject.stwReaktionsfunktionen_US
dc.subject.stwSchätzungen_US
dc.subject.stwUSAen_US
dc.titleTesting for contemporary fiscal policy discretion with real time dataen_US
dc.typeWorking Paperen_US
dc.identifier.ppn543476464en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:bubdp1:6145-
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

Files in This Item:
File Description SizeFormat
200724dkp.pdf348.04 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.