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Fiscal policy and national saving

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  • Marc Hayford

Abstract

This paper uses structural vector autoregressions along with structural measures of fiscal policy to measure the dynamic impact of fiscal policy shocks on the output gap and national saving. Positive shocks to government purchases and negative shocks to real net taxes are found to increase the output gap. Positive shocks to the government's structural surplus increases national saving although the effects are small. Positive shocks to government purchases are found to substantially reduce national saving. Negative shocks to real net tax revenues as a share of potential GDP have a small negative impact on national saving.

Suggested Citation

  • Marc Hayford, 2005. "Fiscal policy and national saving," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 981-992.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:9:p:981-992
    DOI: 10.1080/00036840500109118
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    References listed on IDEAS

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    Cited by:

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    3. Duy-Tung Bui, 2018. "Fiscal policy and national saving in emerging Asia: challenge or opportunity?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 305-322, August.

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