Dynamic effects of fiscal policy and fiscal multipliers in Croatia*

The aim of this paper is to analyze the effects of discretionary measures of fiscal policy on the economic activity and to estimate the size of fiscal multipliers in Croatia. Econometric framework is based on the structural VAR model (SVAR), with Blanchard-Perotti identification method that uses information on institutional characteristics of fiscal system. The analysis is conducted on quarterly data for total expenditures and indirect taxes of central, central consolidated and general consolidated government and aggregate demand for the period from 2004-2012. The results show that our initial assumptions about the difference in the size of the multiplier of government expenditures and indirect tax revenues between three levels of government consolidation have been confirmed. Key words: fiscal policy, fiscal multipliers, SVAR, Croatia. JEL classification: E62, H20, H50. Dinamicki ucinci fiskalne politike i fiskalni multiplikatori u Hrvatskoj. Sazetak. Cilj ovog rada je analizirati ucinke diskrecijskih mjera fiskalne politike na gospodarsku aktivnost privatnog sektora te procijeniti velicinu fiskalnih multiplikatora u Hrvatskoj. U radu se koristi strukturni VAR model (SVAR) za ciju se identifikaciju koristi Blanchard-Perotti metoda utemeljena na institucionalnim obiljezjima fiskalnog sustava. Analiza se provodi nad kvartalnim podacima o ukupnim rashodima i indirektnim porezima sredisnje, sredisnje konsolidirane i opee konsolidirane drzave te agregatnoj potraznji za razdoblje od 2004.-2012. godine. Rezultati empirijske analize potvrduju nasu polaznu hipotezu da postoji razlika u velicini multiplikatora na razlicitim razinama konsolidacije drzavnog proracuna. Kljucne rijeci: fiskalna politika, fiskalni multiplikatori, SVAR, Hrvatska. JEL klasifikacija: E62, H20, H50.

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