Impact of government spending shocks in the Visegrad countries, 1999Q1–2019Q4
Impact of government spending shocks in the Visegrad countries, 1999Q1–2019Q4

Summary/Abstract: This study investigates the impact of a fiscal policy spending shock on the economy of the Visegrad 4 countries. The impact is estimated with an SVAR model, and the calculations are based on 84 quarterly observations (1999Q1–2019Q4). The results suggest that fiscal expansion has a larger than usual impact in the V4 countries (except for Slovakia): the estimated long-term (5-year) cumulative spending multipliers are 0.81 for Czechia, 1.14 for Hungary, and 1.76 for Poland (the Slovakian multiplier has a value of –0.18, but it is not significant). The discussion section also connects higher spending multipliers with a higher share of value added tax (VAT) revenues, a higher debt ratio, higher foreign debt, and lower openness.

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