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Journal of Economic Surveys

THE EFFECTS OF DISCRETIONARY FISCAL POLICY ON MACROECONOMIC AGGREGATES: A REAPPRAISAL

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Acknowledgement
I thank Christophe André, Michael P. Devereux, Alfons Weichenrieder, Tom Zimmermann and two anonymous referees for helpful suggestions and comments. The usual disclaimer applies.

Abstract

Abstract Fiscal stimuli to recover? A cascade of academic and layman articles debate the effectiveness of fiscal policy in stimulating the economy backed up by different economic models and empirical support. This paper surveys the theoretical predictions and recent empirical vector autoregression evidence on the short-run effects of discretionary fiscal policy on macroeconomic aggregates.

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