Efficiency of the fiscal policy and the fiscal multipliers – the case of the Republic of Macedonia
Journal
Economic Research Institute at the Bulgarian Academy of Sciences
Date Issued
2016
Author(s)
Abstract
The aim of this paper is two-fold: to analyze the relevance of fiscal multiplier as
concept used in assessing the efficiency of the fiscal policy in general, and to apply
empirical analysis on the fiscal policy multipliers in the case of the Republic of
Macedonia. On the first aspect, we emphasize the very different results obtained by
the extensive empirical literature on the size and sign of fiscal multipliers, both for
changes in taxes and changes in government expenditures. On the second aspect, we
apply the VAR methodology in the analysis of the efficiency of the fiscal policy of
the Republic of Macedonia during the period 2000-2012, so that we could be able to
study the effects of various fiscal measures during the relatively good times preceding
the global financial crisis and Great Recession as well as the effects of the various
countercyclical fiscal measures aimed at alleviating the consequences of the
macroeconomic downfall associated with those landmark events. One of the most
interesting results of the empirical analysis in the paper is the negative sign obtained
for the fiscal multipliers in the case of the Republic of Macedonia.
concept used in assessing the efficiency of the fiscal policy in general, and to apply
empirical analysis on the fiscal policy multipliers in the case of the Republic of
Macedonia. On the first aspect, we emphasize the very different results obtained by
the extensive empirical literature on the size and sign of fiscal multipliers, both for
changes in taxes and changes in government expenditures. On the second aspect, we
apply the VAR methodology in the analysis of the efficiency of the fiscal policy of
the Republic of Macedonia during the period 2000-2012, so that we could be able to
study the effects of various fiscal measures during the relatively good times preceding
the global financial crisis and Great Recession as well as the effects of the various
countercyclical fiscal measures aimed at alleviating the consequences of the
macroeconomic downfall associated with those landmark events. One of the most
interesting results of the empirical analysis in the paper is the negative sign obtained
for the fiscal multipliers in the case of the Republic of Macedonia.
Subjects