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Estimating Fiscal Multipliers by Combining Statistical Identification with Potentially Endogenous Proxies

Sascha A. Keweloh, Mathias Klein, Jan Prüser

arXiv 25 Feb 2023 · Econometrics · publishedEconometrics Journal (2025) · 3 citations (OpenAlex)

arXiv:2302.13066 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Different proxy variables used in fiscal policy SVARs lead to contradicting conclusions regarding the size of fiscal multipliers. Our analysis suggests that the conflicting results may stem from violations of the proxy exogeneity assumptions. We propose a novel approach to include proxy variables into a Bayesian non-Gaussian SVAR, tailored to accommodate potentially endogenous proxies. Using our model, we find that increasing government spending is more effective in stimulating the economy than reducing taxes.

Citation extraction

65
references
163
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distinct cited
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appendix boundary found by appendix_command · 54% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Caldara, D. and Kamps, C (2017) The analytics of svars: a unified framework to measure fiscal multipliers0.88526669%
2Anttonen, J., Lanne, M., and Luoto, J (2023) Statistically Identified SVAR Model with Potentially Skewed and Fat-Tailed Errors0.8746367%
3Mertens, K. and Ravn, M. O (2014) A Reconciliation of SVAR and Narrative Estimates of Tax Multipliers0.84728861%
4Braun, R (2023) The importance of supply and demand for oil prices: evidence from non-gaussianity0.84333100%
5Yin, G (2009) Bayesian generalized method of moments0.8226283%
6Mertens, K. and Ravn, M. O (2013) The Dynamic Effects of Personal and Corporate Income Tax Changes in the United States0.81142100%
7Montiel Olea, J. L., Plagborg-Mller, M., and Qian, E (2022) Svar identification from higher moments: Has the simultaneous causality problem been solved?0.81142100%
8Keweloh, S. A (2024) Uncertain short-run restrictions and statistically identified structural vector autoregressions self0.7375340%
9Caldara, D. and Herbst, E (2019) Monetary policy, real activity, and credit spreads: Evidence from bayesian proxy svars0.73732100%
10Schlaak, T., Rieth, M., and Podstawski, M (2023) Monetary policy, external instruments, and heteroskedasticity0.73732100%

Showing the top 10 of 66 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
12403.087530.81142
2A large non-Gaussian structural VAR with application to Monetary Policy0.40511
3Beyond Validity: SVAR Identification Through the Proxy Zoo0.40511