Is Fiscal Policy More Effective in Uncertain Times or During Recessions?
58 Pages Posted: 25 Aug 2017
Date Written: August 23, 2017
Abstract
This paper estimates the impact of government spending shocks on economic activity during periods of high and low uncertainty and during periods of boom and recession. We find that government spending shocks have larger impacts on output in booms than in recessions and larger impacts during tranquil times than during uncertain times. The results suggest that confidence plays an important role in explaining this differential impact.
Keywords: fiscal policy, vector autoregressions, uncertainty
JEL Classification: E62, E32, C32
Suggested Citation: Suggested Citation
Alloza, Mario, Is Fiscal Policy More Effective in Uncertain Times or During Recessions? (August 23, 2017). Banco de Espana Working Paper No. 1730, Available at SSRN: https://ssrn.com/abstract=3024538 or http://dx.doi.org/10.2139/ssrn.3024538
Do you have a job opening that you would like to promote on SSRN?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.
