Estimating the fiscal multiplier in Argentina
AbstractArgentina's government has resorted to fiscal policy as a countercyclical tool to mitigate the negative impact of the current economic downturn on aggregate demand. Empirical results based on a vector error correction model suggest, however, that the fiscal multiplier is relatively small and short-lived. This could reflect a number of factors, including the higher propensity of households to save during the economic downturn, the implementation lag of public expenditures, particularly of capital expenditures, and the narrow tax base that limits the impact of countercyclical revenue measures on domestic demand.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5220.
Date of creation: 01 Feb 2010
Date of revision:
Debt Markets; Fiscal Adjustment; Economic Stabilization; Economic Theory&Research; Emerging Markets;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-17 (All new papers)
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- Vlasov, S. & Ponomarenko, A., 2010. "The Role of Budget Policy under the Financial and Economic Crisis," Journal of the New Economic Association, New Economic Association, issue 7, pages 111-133.
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