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Efficiency of the Fiscal Policy and the Fiscal Multipliers – The Case of the Republic of Macedonia

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  • Vladimir Filipovski
  • Taki Fiti
  • Borce Trenovski

Abstract

The aim of this paper is two-fold: to analyze the relevance of fiscal multiplier as concept used in assessing the efficiency of the fiscal policy in general, and to apply empirical analysis on the fiscal policy multipliers in the case of the Republic of Macedonia. On the first aspect, we emphasize the very different results obtained by the extensive empirical literature on the size and sign of fiscal multipliers, both for changes in taxes and changes in government expenditures. On the second aspect, we apply the VAR methodology in the analysis of the efficiency of the fiscal policy of the Republic of Macedonia during the period 2000-2012, so that we could be able to study the effects of various fiscal measures during the relatively good times preceding the global financial crisis and Great Recession as well as the effects of the various countercyclical fiscal measures aimed at alleviating the consequences of the macroeconomic downfall associated with those landmark events. One of the most interesting results of the empirical analysis in the paper is the negative sign obtained for the fiscal multipliers in the case of the Republic of Macedonia.

Suggested Citation

  • Vladimir Filipovski & Taki Fiti & Borce Trenovski, 2016. "Efficiency of the Fiscal Policy and the Fiscal Multipliers – The Case of the Republic of Macedonia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 3-23.
    • Handle: RePEc:bas:econst:y:2016:i:1:p:3-23
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    Cited by:

    1. Milan Deskar-Škrbić & Hrvoje Šimović, 2017. "The effectiveness of fiscal spending in Croatia, Slovenia and Serbia: the role of trade openness and public debt level," Post-Communist Economies, Taylor & Francis Journals, vol. 29(3), pages 336-358, July.
    2. Nicolae-Bogdan Ianc & Camelia Turcu, 2019. "So alike, yet so different: comparing fiscal multipliers across E(M)U candidates," Working Papers 2019.03, International Network for Economic Research - INFER.
    3. Masten, Igor & Grdović Gnip, Ana, 2019. "Macroeconomic effects of public investment in South-East Europe," Journal of Policy Modeling, Elsevier, vol. 41(6), pages 1179-1194.
    4. Mirdala, Rajmund & Kameník, Martin, 2017. "Effects of Fiscal Policy Shocks in CE3 Countries (TVAR Approach)," MPRA Paper 79918, University Library of Munich, Germany.
    5. Ianc, Nicolae-Bogdan & Turcu, Camelia, 2020. "So alike, yet so different: Comparing fiscal multipliers across EU members and candidates," Economic Modelling, Elsevier, vol. 93(C), pages 278-298.

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    More about this item

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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