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http://hdl.handle.net/10419/44961
  

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dc.contributor.authorBaum, Anjaen_US
dc.contributor.authorKoester, Gerrit B.en_US
dc.date.accessioned2011-04-12en_US
dc.date.accessioned2011-04-15T09:44:54Z-
dc.date.available2011-04-15T09:44:54Z-
dc.date.issued2011en_US
dc.identifier.isbn978-3-86558-691-9en_US
dc.identifier.urihttp://hdl.handle.net/10419/44961-
dc.description.abstractDoes the state of the business cycle matter for the effects of fiscal policy shocks on GDP? This study analyses quarterly German data from 1976 to 2009 in a threshold SVAR, expanding the SVAR approach by Blanchard and Perotti (2002). In a linear benchmark SVAR, the analysis finds that hiking spending yields a short-term fiscal multiplier of around 0.70, while the fiscal multiplier resulting from an increase in taxes and social security contributions is -0.66. In addition, the threshold model derives fundamentally new insights on the effects of shocks, depending on when in the business cycle they occur, their size and their direction. Most importantly, fiscal spending multipliers are much larger in times of a negative output gap but have only a very limited effect in times of a positive output gap. Discretionary revenue policies, on the other hand, have a generally more limited impact. Our findings have important implications for the optimal fiscal policy mix over different stages of the business cycle. Various robustness checks, including a different threshold specification, do not influence these implications substantially.en_US
dc.language.isoengen_US
dc.publisherDt. Bundesbank Frankfurt, M.en_US
dc.relation.ispartofseriesDiscussion Paper Series 1: Economic Studies 2011,03en_US
dc.subject.jelE62en_US
dc.subject.jelE32en_US
dc.subject.jelC54en_US
dc.subject.ddc330en_US
dc.subject.keywordfiscal policyen_US
dc.subject.keywordbusiness cycleen_US
dc.subject.keywordnonlinear analysisen_US
dc.subject.keywordfiscal multipliersen_US
dc.titleThe impact of fiscal policy on economic activity over the business cycle - evidence from a threshold VAR analysisen_US
dc.typeWorking Paperen_US
dc.identifier.ppn65618079Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:bubdp1:201103-
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

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