Effectiveness of Fiscal Policy in the U.K. during the 1960-1990 Time Period
Department or Administrative Unit
This study investigates the impact of fiscal policy on the U.K. economy during the 1960 - 1990 time period. The empirical analysis is conducted within the Granger causality testing methodology. Initially the causal flows between fiscal expenditures, deficits and nominal GDP are examined. A hi-directional causal flow between expenditures and nominal GDP is established while deficits and nominal GDP are found to be statistically independent. However, the main contribution of this research lies in its emphasis on analyzing the impact of fiscal expenditures on real output and prices. The results of the trivariate analysis indicate the absence of causal flows from fiscal expenditures to real GDP while the U.K. economy's prices appear to be causally affected by these expenditures.
Saunders, Peter J., "Effectiveness of Fiscal Policy in the U.K. during the 1960-1990 Time Period" (2006). All Faculty Scholarship for the College of Business. 165.
Indian Journal of Economics & Business