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Fiscal Policy and National Saving in Mexico, 1980-2006

  • Alejandro Villagómez

    ()

    (Division of Economics, CIDE)

  • Bernardo Roth Rivero

This paper uses structural vector autoregressions (SVAR) to characterize the dynamic impact of fiscal policy on national saving. SVAR´s have extensively been used to characterize the impact of monetary policy on the economy but have not been applied as much to analyzing fiscal policy. This paper focuses on the impact of fiscal policy on national saving and the data used is adjusted for inflation and cyclical effects, rather than using traditional estimations by official entities. Our empirical analysis shows that fiscal policy has an important economic impact on national saving, any impact on private saving and a negative but non-significant effect on the output gap.

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File URL: http://cide.edu/repec/economia/pdf/DTE387.pdf
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Paper provided by CIDE, División de Economía in its series Working papers with number DTE 387.

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Length: 27 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:emc:wpaper:dte387
Contact details of provider: Postal: Carretera México Toluca 3655 Lomas Sta. Fe, México D.F.
Phone: 01 800 021 2433
Web page: http://www.cide.edu/divisiones-academicas/economia/
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  1. J. Humberto Lopez & K. Schmidt-Hebbel & Luis Servén, 2000. "How Effective is Fiscal Policy in Raising National Saving?," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 226-238, May.
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  3. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "What drives private saving around the world?," Policy Research Working Paper Series 2309, The World Bank.
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  7. Eggerstedt, Harald & Hall, Rebecca Brideau & Van Wijnbergen, Sweder, 1995. "Measuring capital flight: A case study of Mexico," World Development, Elsevier, vol. 23(2), pages 211-232, February.
  8. repec:fth:harver:1530 is not listed on IDEAS
  9. Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
  10. Marc Hayford, 2005. "Fiscal policy and national saving," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 981-992.
  11. Ben S. Bernanke & Ilian Mihov, 1995. "Measuring monetary policy," Working Papers in Applied Economic Theory 95-09, Federal Reserve Bank of San Francisco.
  12. Oks, Daniel F., 1992. "Stabilization and growth recovery in Mexico : lessons and dilemmas," Policy Research Working Paper Series 833, The World Bank.
  13. Christopher A. Sims & Tao Zha, 1996. "Bayesian methods for dynamic multivariate models," Working Paper 96-13, Federal Reserve Bank of Atlanta.
  14. Haque, Nadeem U & Montiel, Peter, 1989. "Consumption in Developing Countries: Tests for Liquidity Constraintsand Finite Horizons," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 408-15, August.
  15. Gramlich, Edward M, 1989. "Budget Deficits and National Saving: Are Politicians Exogenous?," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 23-35, Spring.
  16. Patricio Arrau & Daniel Oks, 1992. "El ahorro privado en México, 1980-1990," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 311-378, July-Dece.
  17. Gil-Diaz, Francisco & Carstens, Agustin, 1996. "One Year of Solitude: Some Pilgrim Tales about Mexico's 1994-1995 Crisis," American Economic Review, American Economic Association, vol. 86(2), pages 164-69, May.
  18. Nicolau, Jo o, 2002. "Stationary Processes That Look Like Random Walks The Bounded Random Walk Process In Discrete And Continuous Time," Econometric Theory, Cambridge University Press, vol. 18(01), pages 99-118, February.
  19. Craig Burnside & Klaus Schmidt-Hebbel & Luis Servén, 1999. "Saving in Mexico: The National and International Evidence," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 181-230, July-Dece.
  20. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  21. Corbo, Vittorio & Schmidt-Hebbel, Klaus, 1991. "Public policies and saving in developing countries," Policy Research Working Paper Series 574, The World Bank.
  22. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
  23. van Wijnbergen, Sweder, 1991. "Debt Relief and Economic Growth in Mexico," World Bank Economic Review, World Bank Group, vol. 5(3), pages 437-55, September.
  24. Gyan Pradhan & Kamal Upadhyaya, 2001. "The impact of budget deficits on national saving in the USA," Applied Economics, Taylor & Francis Journals, vol. 33(13), pages 1745-1750.
  25. Evans, Paul & Karras, Georgios, 1996. "Do Economies Converge? Evidence from a Panel of U.S. States," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 384-88, August.
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