Services on Demand
Journal
Article
Indicators
- Cited by SciELO
- Access statistics
Related links
- Cited by Google
- Similars in SciELO
- Similars in Google
Share
Cuadernos de Economía
Print version ISSN 0121-4772
Abstract
CARRILLO MALDONADO, Paúl A.. The effect of fiscal policy on expansions and recessions in Ecuador: A MSVAR model. Cuad. Econ. [online]. 2017, vol.36, n.71, pp.405-439. ISSN 0121-4772. https://doi.org/10.15446/cuad.econ.v36vn72.53570.
This paper provides evidence of the effect of fiscal policy on the Ecuadorian economy in periods of recession and expansion between 2003-2013, using a MSVAR with government spending, oil income, taxes, and an IAE-NP. We show that government spending has a positive impact on economic activity, and there is a greater effect during recessions than there is during expansions. An increase in taxes has a negative effect, and there is a greater effect during times of crisis. Oil income generates a permanent positive impact on the economy, and it has a greater effect during periods of expansion. It should be noted that only the effect of the tax increase is statistically significant: a result that is consistent with previous studies of the Ecuadorian economy.
JEL: E62, E32, C34, C32.
Keywords : Fiscal policy; GPD; business cycles; MSVAR; Ecuador.