Is Fiscal Policy More Effective in Uncertain Times or During Recessions?

Mario Alloza

No 1631, Discussion Papers from Centre for Macroeconomics (CFM)

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 (search for similar items in EconPapers)
JEL-codes: C32 E32 E62 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2014-04, Revised 2016-10
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Citations: View citations in EconPapers (22)

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http://www.centreformacroeconomics.ac.uk/Discussio ... MDP2016-31-Paper.pdf Revised version, 2016 (application/pdf)

Related works:
Working Paper: Is fiscal policy more effective in uncertain times or during recessions? (2017)
Working Paper: Is fiscal policy more effective in uncertain times or during recessions? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:1631

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