Output effects of fiscal stimulus in Central and Eastern European countries
LTReikšminiai žodžiai: Fiskaliniai daugikliai; Panelinis vektoriaus klaidų taisymo modelis; Panelinis vektorinis klaidų taisymo modelis; Vidurio ir Rytų Europos šalys; Central and Eastern European countries; Fiscal multipliers; Panel vector error correction model.
ENIn spite of the rapidly growing research on fiscal multipliers over recent years, little evidence has been so far accumulated in developing and emerging economies. This paper investigates the nature and the size of fiscal multipliers in Central and Eastern European (CEE) countries. Unlike most of the existing literature, we draw upon a panel vector error correction model, which appropriately captures the common long-term path of CEE countries, while allowing for different shortrun dynamics, in an integrated setup. Our main results show that the spending multiplier is positive, but low on average. Moreover, its sign, significance and magnitude vary across CEE. Finally, both impulse and cumulative fiscal multipliers are sensitive to a wide range of CEE characteristics, including the exchange rate regime, the level of economic development, the fiscal stance and the openness degree. [From the publication]
