Greek Fiscal Multipliers Revisited: Government Spending Cuts vs. Tax Hikes and the Role of Public Investment Expenditure
The present empirical study estimates regime-dependent fiscal multipliers for a range of key government revenue and expenditure categories in Greece. In more detail, the study employs a Multivariate Threshold Autoregressive Model (TVAR) that has a number of unique features that make it particularly suitable for our empirical analysis. The primary aim of our exercise is to: (i) check the robustness of the results presented in a number of earlier empirical studies; and (ii) take a closer look at certain important government expenditure categories: for instance, public investment outlays that could potentially play a key role in facilitating a return to positive economic growth.
KeywordsFiscal Policy Euro Area Government Spending Fiscal Balance Fiscal Stimulus
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