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The output effects of systematic and non-systematic fiscal policy changes in Greece

Author

Listed:
  • Athanasios O. Tagkalakis

    (Bank Of Greece, Economic Research Department)

Abstract

This paper investigates the effects of systematic (or rules-based) and non-systematic (exogenous) fiscal policy changes on output growth in Greece, focusing also on the composition of fiscal policy. Exogenous fiscal policy changes are associated with Keynesian responses (with the exception of net transfers and VAT). Systematic government spending cuts aiming at improving fiscal performance although they tend to have a Keynesian effect on output growth in the short term, they ultimately result in a non-Keynesian response, raising output growth. Systematic direct tax hikes, aiming at correcting fiscal imbalances, can have positive medium to long term growth effects.

Suggested Citation

  • Athanasios O. Tagkalakis, 2013. "The output effects of systematic and non-systematic fiscal policy changes in Greece," Economics Bulletin, AccessEcon, vol. 33(3), pages 1816-1831.
    • Handle: RePEc:ebl:ecbull:eb-13-00325
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fiscal rules; output growth; exogenous; systematic;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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