Impact of Fiscal Policy on Consumption and Labor Supply under a Time-Varying Structural VAR Model

Shaheen, Rozina

doi:10.3390/economies7020057

Cited by 4 publications

(3 citation statements)

References 60 publications

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“…Such expansionary fiscal policy, presupposing short-run price stability, increases aggregate demand, hence increasing income and employment and, as a result of multiplier effects, consumption. On the empirical level, Shaheen (2019) finds strong evidence on the impact of public expenditure on output generating concrete findings on the transmission channels of fiscal policy, the size of the multiplier generated by fiscal stimulus in the short term and the impact of fiscal policy on long-term growth.…”

Section: Theoretical Framework and Research Methodologiesmentioning

confidence: 99%

Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

Alami

Idrissi

Bousselhami

et al. 2021

JBSED

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PurposeThe present paper aims to evaluate the structural impact of exogenously induced fiscal shocks on the Moroccan economy. This entails an analysis of the effect on the GDP of COVID-19-induced fiscal shocks manifesting in terms of budgetary revenues and expenditures. A key aspect of this analysis addresses the size of the tax and fiscal multipliers.Design/methodology/approachThe study examines the structural relationship between five variables during the period between Q1 2009 and Q2 2020 using an SVAR approach that allows for a dynamic interaction between ordinary expenditures and revenues on a quarterly basis.FindingsPositive structural shocks on public spending are likely to negatively impact economic growth. Negative economic growth, in turn, will damage price levels and interest rates, mainly over the long term. However, public-revenue-multiplier-associated shocks exceed these price- and interest-rate multiplier-associated shocks. Indeed, a structural shock to ordinary revenues can have a positive but insignificant impact on the GDP stemming from the ensuing decrease in the government budget deficit that proceeds from the increase in government revenues.Originality/valueThis is one of the first studies in the Moroccan context to assess the impact of the current worldwide pandemic on public finances. In addition, this study highlights the importance of boosting economic recovery through public spending.

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Section: Theoretical Framework and Research Methodologiesmentioning

confidence: 99%

Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

Alami

Idrissi

Bousselhami

et al. 2021

JBSED

View full text Add to dashboard Cite

show abstract

“…Dampaknya bagi perekonomian secara makro yaitu dapat meningkatkan agregat demand, mendorong peningkatan pendapatan, dan meningkatkan partisipasi kerja. Pada akhirnya, efek tersebut akan berakhir pada terciptanya efek multipliyer dalam meningkatkan konsumsi secara umum (Shaheen, 2019;Werning, 2012).…”

Section: Kebijakan Fiskal Bantuan Sosial Dan Pemulihan Ekonomiunclassified

Recovery of Household Consumption as Accelerator of Economic Recovery in East Java: Empirical Study and Macro Policy Strategies

Muin

2022

EJAVEC

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The Covid-19 pandemic has harmed the economy in East Java. Households with the largest share of RGDP also experienced sluggish demand, which impacted the economic decline in East Java of more than eight trillion rupiahs. Economic recovery efforts through household consumption recovery are one of the strategic options to accelerate general economic recovery. Therefore, this study was conducted on RGDP data for household expenditure groups in all districts/cities in East Java during the 2016-2020 period using a panel regression analysis approach. The variables used include household consumption GRDP growth, inflation, regional poverty profile, percentage of internet users for online shopping, and the realization of social spending per capita of the poor. The findings of this study indicate that household consumption in East Java is classified as inelastic to price changes. It is due to the dominance of food consumption and controlled inflation. Meanwhile, the regional poverty profile has a negative impact on the recovery of household consumption. It shows that districts/cities with a high percentage of poor people tend to be more difficult to recover. Furthermore, the digitalization of the economy through e-commerce has not yet had a significant effect on the recovery of household consumption. It is due to the low use of the internet for online shopping among the population. The realization of social assistance per capita has a positive effect in encouraging the recovery of household consumption, although the contribution given is relatively small. It is caused by the low social assistance received compared to the loss of income experienced by the community. As a follow-up, there are four policies that the government can take to encourage the recovery of household consumption, including the sustainability of food price stabilization policies, increased penetration and digital education for MSMEs and the public, a combination of massive and comprehensive poverty alleviation policies, and synchronization of fiscal policy between government level.

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“…In the literature, it is possible to identify several studies that test the relationship between fiscal policy and a set of other variables (see, for example, Hasanov et al (2018), Shaheen (2019), Malla and Pathranarakul (2022), Tendengu et al (2022)).…”

mentioning

confidence: 99%

Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests

Ferraz

2023

Economies

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The Portuguese First Republic (1910–1926) was marked by significant instability at the most diverse levels. With a special focus on the financial dimension of this period, the objective of this paper is to test the sustainability of the Portuguese fiscal policy, also referred to as the sustainability of public finances itself. The methodology involves testing the stationarity of public debt and budget balance and also the cointegration between state revenue and expenditure. The results obtained shows that the state’s intertemporal budgetary constraint was violated during the First Republic regime, which denotes unsustainability. This conclusion is justified by the existence of a non-stationary budget balance and the absence of cointegration between state revenue and expenditure. These results are manifestly different from those that have already been obtained for other Portuguese regimes, namely for the Estado Novo (1933–1974) and democracy (1974–present), where sustainability existed. This paper is yet another demonstration of how important it is to maintain control of state’s accounts. We hope that this paper can be useful to stimulate new research on Portuguese public finances and also on the important issue of fiscal policy sustainability.

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Impact of Fiscal Policy on Consumption and Labor Supply under a Time-Varying Structural VAR Model

Cited by 4 publications

References 60 publications

Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

Recovery of Household Consumption as Accelerator of Economic Recovery in East Java: Empirical Study and Macro Policy Strategies

Testing the Sustainability of Fiscal Policy during the Portuguese First Republic Using Stationary and Cointegration Tests

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