Changing Impact of Fiscal Policy on Selected ASEAN Countries
AbstractThis paper investigates the effectiveness of fiscal policy in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. Through a structural vector autoregression (VAR) 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 the impact of taxes on output mainly reflect heightened concerns over public finances amid the Asian financial crisis and the recent global financial crisis. On the other hand, for Singapore and Thailand, there is evidence that government spending can at times be useful as a tool for countercyclical policy.
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Bibliographic InfoPaper provided by Asian Development Bank in its series Working Papers on Regional Economic Integration with number 70.
Length: 52 pages
Date of creation: 01 Dec 2010
Date of revision:
ASEAN; fiscal policy; structural VAR; time-varying VAR;
Other versions of this item:
- Tang, Hsiao Chink & Liu, Philip & Cheung, Eddie C., 2013. "Changing impact of fiscal policy on selected ASEAN countries," Journal of Asian Economics, Elsevier, vol. 24(C), pages 103-116.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-PBE-2011-01-03 (Public Economics)
- NEP-SEA-2011-01-03 (South East Asia)
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