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- Title
Effectiveness of the Australian Fiscal Stimulus Package: A DSGE Analysis.
- Authors
Li, Shuyun May; Spencer, Adam Hal
- Abstract
We develop and estimate a small open economy dynamic stochastic general equilibrium model to investigate the effectiveness of the Australian fiscal stimulus package introduced in the aftermath of the global financial crisis (GFC). The estimated model implies a fiscal multiplier of 0.9 on impact and 1.26 with one-year monetary accommodation. Utilising the estimated shocks - in particular, the fiscal shocks that mimic the stimulus transfers - we conduct several counterfactual policy experiments. Our results suggest that the stimulus transfers were almost equally important as the concurrent monetary easing actions in helping the Australian economy to avoid a recession after the GFC.
- Subjects
AUSTRALIAN economy; ECONOMIC equilibrium; FREE trade; RECESSIONS; GLOBAL Financial Crisis, 2008-2009; PREVENTION
- Publication
Economic Record, 2016, Vol 92, Issue 296, p94
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/1475-4932.12224