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Fiscal devaluation in a small open economy
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SYSNO ASEP 0505022 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Ostatní články Title Fiscal devaluation in a small open economy Author(s) Ambriško, Róbert (NHU-C) Source Title Russian Journal of Money and Finance. - : Tsentral'nyi Bank Rossiiskoi Federatsii - ISSN 0130-3090
Roč. 78, č. 1 (2019), s. 67-88Number of pages 22 s. Language eng - English Country RU - Russian Federation Keywords Bayesian estimation ; DSGE ; fiscal devaluation Subject RIV AH - Economics OECD category Applied Economics, Econometrics Method of publishing Open access Institutional support NHU-C - Progres-Q24 DOI 10.31477/rjmf.201901.67 Annotation Fiscal devaluation, meaning a shift from payroll to indirect taxes, can be beneficial for a small open economy such as the Czech Republic. Using a structural fiscal DSGE model, I show that fiscal devaluation can boost real GDP growth by 0.5 percentage points in the first year, when a budget-neutral tax shift of the magnitude of 1% of GDP occurs from direct taxes to consumption tax. I also calculate fiscal multipliers for several revenue and expenditure categories of the government budget, the largest of which (after the first year) are government consumption (0.6), government investment (0.5), and social security contributions paid by employers (0.4). These results corroborate the hypothesis that the government can easily boost the economy by adjusting fiscal instruments appropriately. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2020 Electronic address https://rjmf.econs.online/upload/iblock/64a/RJMF_78-01_ENG_Ambrisko.pdf
Number of the records: 1