Public finance and monetary policies as economic stabilizer: Unique or universal across countries?

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Published: Sep 10, 2021
Updated: 2021-09-10
DOI: https://doi.org/10.20983/noesis.2016.1.1
Keywords:
Government spending OECD GDP growth panel vector auto regression medium-income country

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Arwiphawee Srithongrung
Wichita State University
http://orcid.org/0000-0003-1272-3022

Abstract

This study examines dynamic effects of fiscal and monetary policies on growth of two distinctive groups: industrialized with high-income and non-industrialized with medium-income economies. The literature is mixed in recommending fiscal and monetary policies to stabilize a national economy, especially for non-industrialized countries. Unlike high-income and industrialized countries, in the non-industrialized countries, capital markets are imperfect; and hence, setting interest rates to target inflation or mitigate recessions will be ineffective because the level of cash flows do not reflect true investment demands, leading to failed monetization. Data were derived from 36 countries over a 31-year period. Panel Vector Auto Regression (PVAR) was used to mitigate endogeneity which is an inherent problem of panel data. The results confirm the major hypothesis.

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How to Cite
Srithongrung, A. (2021). Public finance and monetary policies as economic stabilizer: Unique or universal across countries?. Noesis. Journal of Social Sciences and Humanities, 25(49), 13–46. https://doi.org/10.20983/noesis.2016.1.1
Issue
Vol. 25 No. 49 (2016)
Section
Social Sciences
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Author Biography

Arwiphawee Srithongrung, Wichita State University

Associate Professor of Public Administration.

Hugo Wall School of Public Affairs

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