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| Maria Pia Olivero |
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| ''Fiscal policy and credit spreads: Evidence from a SVAR'' |
| ( 2019, Vol. 39 No.2 ) |
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| We study the interaction between fiscal policy, economic activity and credit market conditions using a structural VAR approach similar to that in Blanchard and Perotti (2002). We show that failing to account for the endogenous response of credit spreads to fiscal policy shocks results in the real effects of these shocks being underestimated. We see our results as indicating the presence of a not yet well understood "credit channel of fiscal policy transmission".
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| Keywords: fiscal policy, credit spreads |
JEL: E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
E4 - Money and Interest Rates: General |
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| Manuscript Received : Jun 21 2018 | | Manuscript Accepted : May 31 2019 |
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