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Assessing the Impact of Fiscal Measures on the Czech Economy

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Author Info

  • Robert Ambrisko
  • Jan Babecky
  • Jakub Rysanek
  • Vilem Valenta

Abstract

We build a satellite DSGE model to investigate the transmission of fiscal policy to the real economy in the Czech Republic. Our model shares features of the Czech National Bank's current g3 forecasting model (Andrle, Hledik, Kamenik, and Vlcek, 2009), but contains a more comprehensive fiscal sector. Crucial fiscal parameters, related mainly to the specified fiscal rule, are estimated using Bayesian techniques. We calculate a set of fiscal multipliers for individual revenue and expenditure items of the government budget. We find that the largest real GDP fiscal multipliers in the first year are associated with government investment (0.4) and social security contributions paid by employers (0.3), followed by government consumption (0.2).

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File URL: http://www.cnb.cz/en/research/research_publications/cnb_wp/download/cnbwp_2012_15.pdf
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Bibliographic Info

Paper provided by Czech National Bank, Research Department in its series Working Papers with number 2012/15.

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Date of creation: Dec 2012
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Handle: RePEc:cnb:wpaper:2012/15

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Related research

Keywords: Bayesian estimation; DSGE; fiscal policy; fiscal rule; fiscal multipliers; open economy.;

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References

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  1. Jordi Gali & David López-Salido & Javier Valles, 2004. "Understanding the effects of government spending on consumption," International Finance Discussion Papers 805, Board of Governors of the Federal Reserve System (U.S.).
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Citations

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Cited by:
  1. Robert Ambrisko & Vitezslav Augusta & Jan Babecky & Michal Franta & Dana Hajkova & Petr Kral & Jan Libich & Pavla Netusilova & Milan Rikovsky & Jakub Rysanek & Pavel Soukup & Petr Stehlik & Vilem Vale, 2013. "Macroeconomic Effects of Fiscal Policy," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 2, volume 11, number rb11/2 edited by Jan Babecky & Kamil Galuscak, August.

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