Arnoldshain Seminar XV
“The EU and Latin America Facing Globalization”
September 4 – 6, 2017

Rezk, Ernesto, FCE-Universidad Nacional de Córdoba, Maria Victoria Catalano, On the debate over the performance of fiscal shocks and government spending multipliers' size: The experience of selected LA emerging and developing countries.
Assessing the real impact of fiscal shocks (stemming from government spending) upon the main macroeconomic variables has normally aroused the interest of academics and policy makers. Nevertheless, most recent contributions referred to developed economies´ policies aimed at curtailing the recession caused by the global international crisis. However, it is also important to assess whether exogenous fiscal spending shocks that took place in the principal emerging and developing countries for countervailing the negative effects of domestic or international crisis upon their economic sectors did in fact result in sizeable fiscal spending multipliers. In this connection, the performance was econometrically assessed of government spending shocks in the following eight Latin American countries: ARGENTINA, BRAZIL, COLOMBIA, CHILE, ECUADOR, MEXICO, PERU and URUGUAY, by using for the estimation of coefficients annual data collected for the period 1993-2015. Statistical series were obtained from different national and international sources whereas dummy series standing for countries´ particular economic environments (financial crises, exchange rate regimes, fragile public finances) were also built on the basis of information in national economic reports in turn resorted to. The econometric model, inspired in the contribution by R. Perotti (1999), and also followed by Corsetti G., Meier A. and G. Muller (2012), followed a two steps analytical structure and acknowledged the effects of the main economic environment´s outstanding features upon the dynamics of fiscal policy transmission. In this connection, and notwithstanding that the econometric estimation purported to show dynamic responses of selected economic aggregates to fiscal spending shocks, under conditions imposed by the economic scenario, both unconditional and conditional equation specifications for the first and the second stage were estimated, shown and analyzed. Key Words: fiscal spending shocks, economic environment dummies, size of fiscal multipliers. JEL: E 62