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Growth enhancing effect of discretionary fiscal policy shocks: Keynesian, Weak Keynesian or Non-Keynesian?

Listed author(s):
  • Şen, Hüseyin
  • Kaya, Ayşe
Registered author(s):

    Using the extended version of the Blanchard and Perotti SVAR technique, this paper attempts to empirically predict the growth enhancing effect of discretionary fiscal policy shocks in both short- and long-run in Turkey over the period 2006:Q1-2015:Q1. Unlike previous studies which have mainly focused on fiscal policy instruments taxes and government spending at the aggregate level, this paper considers these instruments at the component level, and then attempts to analyze comparatively the effect of changes in each component on growth. The findings of the paper show that growth enhancing effect of discretionary fiscal policy shocks varies according to its components. However, discretionary fiscal policy shocks at the component level indicate mixed results. In the short-run, only the shocks to government spending have a Keynesian effect. In all other cases, discretionary fiscal policy shocks seem to capture a weak Keynesian and/or non-Keynesian effect in the case of Turkey.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 65976.

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    Date of creation: 01 Aug 2015
    Date of revision: 05 Aug 2015
    Handle: RePEc:pra:mprapa:65976
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