Artikel

Is there asymmetry in the relationship between government consumption dynamics and economic activity? Evidence from G7 economies

In this paper, based on a quarterly dataset of G7 countries with the application of a nonlinear ARDL model we test for the presence of a short-run and long-term asymmetry in the relationship between government spending and economic activity. The main aim of this study is to analyze the relationship between government spending and economic activity in two separate scenarios, first, in periods when government spending increases and, second, in periods when government spending decreases. Our key findings are, first, the linear model that produces a positive relationship between government consumption and economic activity. Second, in the nonlinear model, more than half of the short-run and long-run coefficients are statistically significant. Third, short-run and long-run asymmetry are detected in four out of seven cases with recognized short-run asymmetry also in the remaining three cases based on graphical analysis. Finally, a negatively inclined short-run asymmetry is detected. The results thus imply a stronger output effect in periods of declining dynamics in government consumption. Future research should be focused on broadening the sample countries and model by adding additional variables.

Sprache
Englisch

Erschienen in
Journal: Naše gospodarstvo / Our Economy ; ISSN: 2385-8052 ; Volume: 67 ; Year: 2021 ; Issue: 4 ; Pages: 1-12

Klassifikation
Wirtschaft
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Fiscal Policy
Thema
fiscal policy
nonlinear ARDL model
G7 countries

Ereignis
Geistige Schöpfung
(wer)
Senekovič, Marko
Ereignis
Veröffentlichung
(wer)
Sciendo
(wo)
Warsaw
(wann)
2021

DOI
doi:10.2478/ngoe-2021-0018
Letzte Aktualisierung
20.09.2024, 08:25 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Senekovič, Marko
  • Sciendo

Entstanden

  • 2021

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