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

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  • 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.

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File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I3-P170.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 33 (2013)
Issue (Month): 3 ()
Pages: 1816-1831

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Handle: RePEc:ebl:ecbull:eb-13-00325

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Keywords: Fiscal rules; output growth; exogenous; systematic;

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