Dynamic Effects of Fiscal Shocks Upon Diverse Macroeconomic Variables: A Structural VAR Analysis for Argentina

Abstract

The paper studies the dynamic effects of fiscal policy shocks upon Argentine macroeconomic variables such as the gross domestic product, the inflation rate and the level of unemployment; a structural Vector Autoregression model is resorted to in order to estimate the impulse response functions; the econometric analysis is carried out for the period 1984-2005 (second quarter) and quarterly logarithmic real variables are used for the VAR´s specification. Point estimation of impulse response functions indicate both a relatively low statistical significance of fiscal shocks upon macroeconomic variables and a short-lived impact of innovations while at the same time cast doubts upon some traditionally accepted Keynesian macroeconomic policy prescriptions.