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The Effectiveness of Fiscal Policy in Mexico

Author

Listed:
  • Angulo-Rodriguez, Hector E.
  • Castillo-Duran, Magda A.
  • Garza-Rodriguez, Jorge
  • Gonzalez-Hernandez, Monica
  • Puente-Ortiz, Ricardo

Abstract

Using a VAR model with quarterly information for the 1980 to 2008 period, this paper studies the dynamic effects of fiscal policy on Gross Domestic Product in the Mexican economy. We find evidence of non–Keynesian effects of government expenditure on GDP in the short run. Also, we find evidence that government revenue has a significant impact on GDP only in the fourth quarter.

Suggested Citation

  • Angulo-Rodriguez, Hector E. & Castillo-Duran, Magda A. & Garza-Rodriguez, Jorge & Gonzalez-Hernandez, Monica & Puente-Ortiz, Ricardo, 2011. "The Effectiveness of Fiscal Policy in Mexico," MPRA Paper 38717, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38717
    as

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    File URL: https://mpra.ub.uni-muenchen.de/38717/1/MPRA_paper_38717.pdf
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    References listed on IDEAS

    as
    1. Rodrigo Cerda & Hermann Gonzalez & Luis Felipe Lagos, 2006. "Is fiscal policy effective? Evidence for an emerging economy: Chile 1833-2000," Applied Economics Letters, Taylor & Francis Journals, vol. 13(9), pages 575-580.
    2. Francisco de Castro, 2006. "The macroeconomic effects of fiscal policy in Spain," Applied Economics, Taylor & Francis Journals, vol. 38(8), pages 913-924.
    3. Maria Neicheva, 2006. "Non-Keynesian Effects of Government Expenditure on Output in Bulgaria: An HP Filter Approach," Post-Communist Economies, Taylor & Francis Journals, vol. 18(1), pages 1-12.
    4. Bernd Lucke, 1999. "Expansionary fiscal contractions and equilibrium indeterminacy: a case study for Germany," Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 697-708.
    5. Niloy Bose & M. Emranul Haque & Denise R. Osborn, 2007. "Public Expenditure And Economic Growth: A Disaggregated Analysis For Developing Countries," Manchester School, University of Manchester, vol. 75(5), pages 533-556, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Non-Keynesian effects; fiscal policy; fiscal consolidations; Mexico;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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