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Title: Fiscal multipliers and macroeconomic performance in the case of Slovakia and Hungary

Authors: Martin Kameník; Anna Ruščáková; Jozefína Semančíková

Addresses: Faculty of Economics, Department of Economic Theories, Technical University of Kosice, Němcovej 32, 040 01 Kosice, Slovakia ' Faculty of Economics, Department of Economic Theories, Technical University of Kosice, Němcovej 32, 040 01 Kosice, Slovakia ' Faculty of Economics, Department of Economic Theories, Technical University of Kosice, Němcovej 32, 040 01 Kosice, Slovakia

Abstract: The aim of the paper is to estimate and assess the impact of fiscal policy shocks on gross domestic product (GDP) in Slovakia and Hungary as the EU and V4 members and to compare the results of how fiscal policy affects the economy with euro compared with the economy with its own currency. The paper is based on the vector autoregressive (VAR) model to compare the impacts of fiscal shocks in government expenditure and government revenues on real Slovak and Hungarian economy and identify possible differences. Government expenditure shock has a short-term positive effect on Slovak and Hungarian GDP, too. Also, the response of GDP to a single shock in government revenues has an immediate negative impact in Hungary in contrast to Slovakia with the positive response at the beginning. Moreover, the findings support that government expenditure has more significant impact on GDP than in the case of government revenues.

Keywords: fiscal policy; fiscal multipliers; VAR; vector autoregressive; GDP; gross domestic product; government expenditure; government revenues; single shock; EU; V4; Slovakia; Hungary.

DOI: 10.1504/IJCEE.2018.088320

International Journal of Computational Economics and Econometrics, 2018 Vol.8 No.1, pp.79 - 94

Available online: 18 Sep 2017 *

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