The Effects of Discretionary Fiscal Policy on Macroeconomic Aggregates: A Reappraisal

Hebous, Shafik

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The Effects of Discretionary Fiscal Policy on Macroeconomic Aggregates: A Reappraisal

Journal of Economic Surveys, Forthcoming

23 Pages Posted: 1 Nov 2009 Last revised: 2 Nov 2010

See all articles by Shafik Hebous

Shafik Hebous

International Monetary Fund

Date Written: October 1, 2010

Abstract

Fiscal stimuli to recover? A cascade of academic and layman-articles debate the effectiveness of fiscal policy in stimulating the economy backed up by different economic models and empirical support. This essay surveys the theoretical predictions and recent empirical Vector Autoregression (VAR) evidence on the short-run effects of discretionary fiscal policy on macroeconomic aggregates.

Keywords: Macroeconomic Policy, Fiscal policy

JEL Classification: E62, H30, H60

Suggested Citation: Suggested Citation

Hebous, Shafik, The Effects of Discretionary Fiscal Policy on Macroeconomic Aggregates: A Reappraisal (October 1, 2010). Journal of Economic Surveys, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1496681