Texas A&M University
Essays on Macroeconomic Aspects of Fiscal Policy.
Degree: PhD, Economics, 2015, Texas A&M University
Recently, various fiscal policies are adopted to overcome severe recessions caused by the Financial Crisis and the Great Recession in many advanced countries. In this dissertation, I focus on the effects of those various fiscal policies on the aggregate economy.
In the first study, I examine the state-dependent effects of government debt on government spending multipliers. First, I estimate the spending multipliers conditional on the level of government debt using US historical data and the two-state direct projection method. The empirical results show that the estimated short-run multipliers in a high debt state are larger than those in a low debt state, which contraries to the conventional prediction. Second, I find evidence to support that the government spending significantly differ by the level of government debt. To understand large short-run multipliers in a high debt state, I construct a New Keynesian model to explain the large short-run multipliers in a high debt state. The model suggests that the interaction between the state-dependent government spending rule and monetary policy could be a potential channel to understand the large short-run multipliers in a high debt state.
In the second study, I investigate the time-varying relation between government budget balances and external balances to test the twin deficit hypothesis. Through a time-varying structural VAR model and the post World War II data for the US economy, I find new time-varying patterns. To provide some insights about the empirical facts, I construct a small open economy New Keynesian model incorporated rule-of-thumb consumers suggested by Gali et al. [2007b]. A shift in exchange rate regimes and slow-adjusting taxes seem to be be useful to understand the empirical results.
Advisors/Committee Members: Jinnai, Ryo (advisor), Zubairy, Sarah (committee member), Zhang, Yuzhe (committee member), Kim, Hagen (committee member).
Subjects/Keywords: fiscal policy; government spending multipliers; twin deficit hypothesis
to Zotero / EndNote / Reference
APA (6th Edition):
Kim, W. (2015). Essays on Macroeconomic Aspects of Fiscal Policy. (Doctoral Dissertation). Texas A&M University. Retrieved from http://hdl.handle.net/1969.1/187007
Chicago Manual of Style (16th Edition):
Kim, Wongi. “Essays on Macroeconomic Aspects of Fiscal Policy.” 2015. Doctoral Dissertation, Texas A&M University. Accessed September 18, 2020.
MLA Handbook (7th Edition):
Kim, Wongi. “Essays on Macroeconomic Aspects of Fiscal Policy.” 2015. Web. 18 Sep 2020.
Kim W. Essays on Macroeconomic Aspects of Fiscal Policy. [Internet] [Doctoral dissertation]. Texas A&M University; 2015. [cited 2020 Sep 18].
Available from: http://hdl.handle.net/1969.1/187007.
Council of Science Editors:
Kim W. Essays on Macroeconomic Aspects of Fiscal Policy. [Doctoral Dissertation]. Texas A&M University; 2015. Available from: http://hdl.handle.net/1969.1/187007