Uncertainty and the effectiveness of fiscal policy in the United States and Brazil: SVAR approach
Eduardo de Sá Fortes Leitão Rodrigues
Abstract:The article analyses the interference of uncertainty on the effectiveness of fiscal policy. This issue is investigated through the lens of a Structural Vector Auto Regressive (SVAR) model for the United States and Brazil. Imposing government spending shocks, the models highlight a positive effect on economic activity. The results suggest Keynesian effects on consumption and GDP. To assess the effects of uncertainty, the models use two indices: the Economic Policy Uncertainty Index (EPU) and the World Uncertain… Show more
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