Fiscal adjustments: lessons from and for the Baltic states
Baltic Journal of Economics
; 22(1):1-27, 2022.
Article
in English
| ProQuest Central | ID: covidwho-1908431
ABSTRACT
This paper aims to investigate the effects of various fiscal policy measures for small and open economies by analysing the implications of fiscal shocks in the Baltic countries based on data for the period from 1995 to 2018. For this purpose, we have chosen structural VAR estimation methods following Blanchard, O., & Perotti, R. (2002). An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output. The Quarterly Journal of Economics, 117(4), 1329–1368, approach and relied on local projections for robustness checks. We find that the impact on growth of direct taxes, government consumption and public investment is strong and persistent in the analysed cases. Although the responses of FDI to fiscal shocks are less consistent as compared to output, in most cases, we get strong and persistent negative reactions in FDI to increasing tax burden.
Business And Economics; Fiscal shocks; fiscal multipliers; fiscal policy; the Baltic states; investment; economic recession; Taxation; Projections; Government spending; Robustness; Economic crisis; Securities markets; Pandemics; Foreign investment; Consumption; Taxes; International finance; Interest rates; Coronaviruses; Expenditures; Public sector; Recessions; Investor behavior; Disease transmission; COVID-19; Tax increases; 92113:Public Finance Activities
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Language:
English
Journal:
Baltic Journal of Economics
Year:
2022
Document Type:
Article
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