Description: Estimating the Fiscal Multiplier in Argentina

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Estimating the Fiscal Multiplier in Argentina

Argentina's government has resorted to fiscal policy as a countercyclical tool to mitigate the negative impact of the current economic downturn on aggregate demand. Empirical results based on a vector error correction model suggest, however, t...

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Bibliographic Details
Main Authors:	Anos-Casero, Paloma, Cerdeiro, Diego, Trezzi, Riccardo
Language:	English
Published:	2012
Subjects:	AGGREGATE DEMAND AUCTION AUTOREGRESSION BIDS BONDS BORROWING CAPITAL EXPENDITURES CAPITAL REPATRIATION COMMODITY COMMODITY EXPORTS CONSUMPTION INCREASES CREDIT LINES CREDITORS DUMMY VARIABLES ECONOMIC ACTIVITY ECONOMIC DOWNTURN ECONOMIC FLUCTUATIONS ECONOMIC RESEARCH ECONOMIC SLOWDOWN ELASTICITY EMERGING ECONOMIES EMERGING-MARKET EXPENDITURE EXPENDITURE INCREASE EXPENDITURES EXPORTS EXTERNAL SHOCKS FINANCIAL CRISIS FISCAL IMPACT FISCAL MEASURES FISCAL MULTIPLIERS FISCAL POLICIES FISCAL POLICY FISCAL SHOCKS FISCAL STIMULUS GDP GOVERNMENT CONSUMPTION GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT INVESTMENT GOVERNMENT REVENUES GOVERNMENT SPENDING INCOME INCOME TAX INFLATION INFORMAL SECTOR INFRASTRUCTURE INVESTMENT INTEREST RATE INTERNATIONAL BANK INTERNATIONAL MONETARY FUND LIQUIDITY LIQUIDITY CONSTRAINTS MONETARY FUND MONETARY POLICY OUTPUT PENSION PENSION FUNDS PRICE STABILITY PRIVATE PENSION PUBLIC EXPENDITURES PUBLIC INVESTMENT RETURN SAFETY NET SAFETY NETS SAVINGS SOCIAL SAFETY NET SOCIAL SECURITY TAX TAX COLLECTION TAX REVENUES TIME DEPOSITS TRANSMISSION MECHANISM TREASURY
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100226102651 http://hdl.handle.net/10986/3707

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Summary:	Argentina's government has resorted to fiscal policy as a countercyclical tool to mitigate the negative impact of the current economic downturn on aggregate demand. Empirical results based on a vector error correction model suggest, however, that the fiscal multiplier is relatively small and short-lived. This could reflect a number of factors, including the higher propensity of households to save during the economic downturn, the implementation lag of public expenditures, particularly of capital expenditures, and the narrow tax base that limits the impact of countercyclical revenue measures on domestic demand.