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Fiscal multipliers in a small open economy: the case of Austria
[The macroeconomic effects of fiscal policy in Portugal: a bayesian SVAR analysis]

Author

Listed:
  • Jan Čapek
  • Jesús Crespo Cuaresma
  • Johannes Holler
  • Philip Schuster

Abstract

We estimate fiscal multipliers for Austria in a framework of model uncertainty emanating from the choice of a particular econometric model. We present a comprehensive framework that allows to assess the effects of different multiplier definitions and choices related to the data, the model employed, and further technical choices associated with the specification of the model exert on fiscal multiplier estimates. The mean present-value government spending multiplier over all models entertained, based on around 3,000 estimates, is 0.68. Estimates of the peak spending multiplier for Austria tend to be larger than present-value spending multipliers, with a mean value of 0.85. The magnitude of the present-value tax multiplier is relatively high, with an average value across specifications of −1.12 and the mean peak tax multiplier is −0.54 for all specifications used.

Suggested Citation

  • Jan Čapek & Jesús Crespo Cuaresma & Johannes Holler & Philip Schuster, 2022. "Fiscal multipliers in a small open economy: the case of Austria [The macroeconomic effects of fiscal policy in Portugal: a bayesian SVAR analysis]," Oxford Economic Papers, Oxford University Press, vol. 74(2), pages 412-430.
    • Handle: RePEc:oup:oxecpp:v:74:y:2022:i:2:p:412-430.
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    File URL: http://hdl.handle.net/10.1093/oep/gpab027
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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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