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This article surveys the empirical literature on the effects of discretionary fiscal policy on the German macroeconomy. Although the qualitative and quantitative effects of fiscal policy are often discussed among politicians and in the public, economists only recently renewed their interest in this topic and have produced only few empirical studies for Germany so far. While older macroeconometric models generally predict positive effects of expansionary policies on output in the short run, newer SVAR studies disagree on the direction of the expected effects. There is, however, some agreement that the effects are likely to be small.

Die makröokonomischen Wirkungen diskretionärer Fiskalpolitik in Deutschland – Was wissen wir empirisch?