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The Effects of Discretionary Fiscal Policy on Macroeconomic Aggregates: A Reappraisal

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  • Hebous, Shafik

Abstract

Fiscal stimuli to recover? A cascade of academic and layman-articles debate the effectiveness of fiscal policy in stimulating the economy backed up by different economic models and empirical support. This essay surveys the theoretical predictions and recent empirical Vector Autoregression (VAR) evidence on the short-run effects of discretionary fiscal policy on macroeconomic aggregates.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23300.

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Date of creation: Jul 2009
Date of revision: Jun 2010
Handle: RePEc:pra:mprapa:23300

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Keywords: Macroeconomic Policy; Fiscal Policy; Multipliers; Fiscal Stimulus; VAR;

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