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The Impact of Fiscal Shocks on the Irish Economy

  • Benetrix, Agustin

    (Trinity College Dublin)

  • Lane, Philip R.

    (Trinity College Dublin)

We study the short-run effects of shocks to government spending on Ireland’s output and its real exchange rate. We show that the impact of government spending shocks critically depend on the nature of the fiscal innovation. Our main finding is that there are important differences between shocks to public investment and shocks to government consumption. Moreover, within the latter category, shocks to the wage and non-wage components also have dissimilar effects.

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Article provided by Economic and Social Studies in its journal Economic and Social Review.

Volume (Year): 40 (2009)
Issue (Month): 4 ()
Pages: 407-434

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Handle: RePEc:eso:journl:v:40:y:2009:i:4:p:407-434
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  17. Giordano, Raffaela & Momigliano, Sandro & Neri, Stefano & Perotti, Roberto, 2007. "The effects of fiscal policy in Italy: Evidence from a VAR model," European Journal of Political Economy, Elsevier, vol. 23(3), pages 707-733, September.
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  21. Agustin S. Benetrix & Philip R. Lane, 2009. "Fiscal Shocks and The Sectoral Composition of Output," The Institute for International Integration Studies Discussion Paper Series iiisdp294, IIIS.
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