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The fiscal policy impact to the Greek economy: Asymmetric evidence from a switching regime approach

Journal of Economics and Political Economy

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Title The fiscal policy impact to the Greek economy: Asymmetric evidence from a switching regime approach
 
Creator DIMITRIOU, Dimitrios;

Department of Economics, National and Kapodistrian University of Athens, 1 Sofokleous Street, 10559 Athens, Greece


PAPPAS, Anastasios; School of Business, University of the Aegean, Michalon 8, Chios 82100, Greece
 
Subject Fiscal policy impact; regime switching; GARCH-DCC; Greek economy
E61; E62; H21
 
Description Abstract. This paper empirically investigates the magnitude of general government expenditures and tax income revenues to the Greek output within a regime-switching framework during the period 2000:1 – 2016:3. This nonlinear methodology captures the fiscal effects across periods of high and low growth. In more deep analysis, we examine the relationship of expenditures and GDP over time, by adopting the GARCH(1,1)-DCC methodology. Our results show that the magnitude of general government expenditures is larger during periods of low growth or economic recession, as well as the magnitude of tax income revenues. Furthermore, during the “bailout” period (2010-2016) when the fiscal adjustment was strict, GDP seem to be even stronger negatively affected by the reduction of government expenditures.Keywords. Fiscal policy impact, regime switching, GARCH-DCC, Greek economy.JEL. E61, E62, H21.
 
Publisher Journal of Economics and Political Economy
Journal of Economics and Political Economy
 
Contributor —
 
Date 2018-03-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEPE/article/view/1598
10.1453/jepe.v5i1.1598
 
Source Journal of Economics and Political Economy; Vol 5, No 1 (2018): March; 121-131
Journal of Economics and Political Economy; Vol 5, No 1 (2018): March; 121-131
2148-8347
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEPE/article/view/1598/1559
 
Rights Copyright (c) 2018 Journal of Economics and Political Economy
http://creativecommons.org/licenses/by-nc/4.0