CONTEMPORARY APPROACHES IN THE ANALYSIS OF ECONOMIC PERFORMANCES
EMPIRICAL EVALUATION OF THE FISCAL MULTIPLIERS
Biljana Stanivuk, Biljana Kovačević, Natasa Tešić
Abstract: The economic crisis that happened in 2008 has created the need for the detailed examination of the particular elements of fiscal policy and quantification of their impact. Due to the consequences of the crisis, all components of consumption have considerably decreased, thus making the issue of their impact on the level of domestic product significant to examine. The fiscal multiplier shows the ratio of a change in gross domestic product (GDP) that appeared as a result of changes in public consumption. Many factors impact the level of fiscal multipliers, such as the size and openness of economy, country’s development level, exchange rate regime, monetary policy, structure of fiscal stimulus, country’s indebtedness, credit rating, etc. With regard to the combination of these factors as well as the chosen methodology and the country in question, the assessments of values of fiscal multipliers range from negative (in small and open economies, highly indebted economies, which apply flexible exchange rate policy) to relatively high values (characteristic for well-developed countries, with the implementation of accommodating monetary policy).
Keywords: fiscal policy, fiscal multipliers, economic growth, cyclic oscillations of economy
Published: p. 185-195
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