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Impact of government spending shocks in the Visegrad countries, 1999Q1-2019Q4

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  • Zoltan Bartha
  • Marco M. Matarrese

Abstract

This study investigates the impact of a fiscal policy spending shock on the economy of the Visegrad 4 countries. The impact is estimated with an SVAR model, and the calculations are based on 84 quarterly observations (1999Q1-2019Q4). The results suggest that fiscal expansion has a larger than usual impact in the V4 countries (except for Slovakia): the estimated long-term (5-year) cumulative spending multipliers are 0.81 for Czechia, 1.14 for Hungary, and 1.76 for Poland (the Slovakian multiplier has a value of -0.18, but it is not significant). The discussion section also connects higher spending multipliers with a higher share of VAT revenues, a higher debt ratio, higher foreign debt, and lower openness.

Suggested Citation

  • Zoltan Bartha & Marco M. Matarrese, 2025. "Impact of government spending shocks in the Visegrad countries, 1999Q1-2019Q4," Papers 2509.21397, arXiv.org.
    • Handle: RePEc:arx:papers:2509.21397
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    References listed on IDEAS

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    1. Valerie A. Ramey & Sarah Zubairy, 2018. "Government Spending Multipliers in Good Times and in Bad: Evidence from US Historical Data," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 850-901.
    2. Caldara, Dario & Kamps, Christophe, 2008. "What are the effects of fiscal policy shocks? A VAR-based comparative analysis," Working Paper Series 877, European Central Bank.
    3. Matteo Deleidi & Davide Romaniello & Francesca Tosi, 2021. "Quantifying fiscal multipliers in Italy: A Panel SVAR analysis using regional data," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1158-1177, October.
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