Changing impact of fiscal policy on selected ASEAN countries
AbstractThis paper investigates the effectiveness of fiscal policy in five Association of Southeast Asian Nations: Indonesia, Malaysia, the Philippines, Singapore and Thailand. Through a small open economy structural vector autoregression model, government spending is found to have weak and largely insignificant impact on output, while taxes are found to have outcomes contrary to conventional theory. Extensions using a time-varying VAR model reveal that the positive impact from higher taxes on output mainly reflects heightened concerns over public finances during the Asian financial crisis and the recent global financial crisis. On the other hand, for Thailand, there is some evidence that government spending can at times be useful as a tool for short-term countercyclical policy.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 24 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/asieco
ASEAN; Fiscal policy; Structural VAR; Time-varying VAR;
Other versions of this item:
- Tang, Hsiao Chink & Liu, Philip & Cheung, Eddie C., 2010. "Changing Impact of Fiscal Policy on Selected ASEAN Countries," Working Papers on Regional Economic Integration 70, Asian Development Bank.
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
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