The effects of fiscal policy in a small, open economy : a structural VAR analysis of fiscal shocks in Norway employing sign restrictions

This thesis investigates how fiscal policy affects output (GDP) in a small, open economy. The analysis utilizes data on Mainland GDP, government spending and taxes in Norway from 1978 to 2017. In order to identify and estimate effects of exogenous fiscal shocks, we employ the sign restrictions approach in a Structural Vector Autogregression (SVAR) model. Our study represents a solid contribution to the literature of fiscal policy for two main reasons. First, we aim to provide empirical evidence on the effects of fiscal policy shocks in a small, open economy, for which the empirical literature is limited. Second, we conduct such an analysis through employing the sign restrictions approach which has not been widely applied thus far. Therefore, the study of Norway through such an approach provides a novel contribution to the suitability of the sign restrictions approach for small, open economies. We find a positive effect on GDP from an increase in government spending, although the spending multiplier on GDP is weak and insignificant in the short run. Following a tax increase, GDP is negatively affected with a significant effect on impact. However, this negative effect is rather short-lived and becomes positive when including private consumption and investment in the model. Thus, we do not find a conclusive effect from tax shocks through the sign restrictions approach. We argue that the inconclusive findings in our analysis are likely due to a limited amount of identified fiscal shocks when employing sign restrictions. This is further supported when utilizing a more conventional recursive ordering approach for identification, through which we find a significantly positive effect on GDP following spending shocks. However, neither the sign restrictions or the conventional recursive approach provides conclusive evidence for tax shocks. Thus, we find that the analysis of net tax levels is an inadequate measure for tax effects in Norway, as tax changes in Norway predominantly focus on marginal tax rates and taxation structures. Keywords – Fiscal policy, Macroeconomics, VAR, Sign restrictionsnhhma

The effects of fiscal policy in a small, open economy : a structural VAR analysis of fiscal shocks in Norway employing sign restrictions

This thesis investigates how fiscal policy affects output (GDP) in a small, open economy. The analysis utilizes data on Mainland GDP, government spending and taxes in Norway from 1978 to 2017. In order to identify and estimate effects of exogenous fiscal shocks, we employ the sign restrictions approach in a Structural Vector Autogregression (SVAR) model. Our study represents a solid contribution to the literature of fiscal policy for two main reasons. First, we aim to provide empirical evidence on the effects of fiscal policy shocks in a small, open economy, for which the empirical literature is limited. Second, we conduct such an analysis through employing the sign restrictions approach which has not been widely applied thus far. Therefore, the study of Norway through such an approach provides a novel contribution to the suitability of the sign restrictions approach for small, open economies. We find a positive effect on GDP from an increase in government spending, although the spending multiplier on GDP is weak and insignificant in the short run. Following a tax increase, GDP is negatively affected with a significant effect on impact. However, this negative effect is rather short-lived and becomes positive when including private consumption and investment in the model. Thus, we do not find a conclusive effect from tax shocks through the sign restrictions approach. We argue that the inconclusive findings in our analysis are likely due to a limited amount of identified fiscal shocks when employing sign restrictions. This is further supported when utilizing a more conventional recursive ordering approach for identification, through which we find a significantly positive effect on GDP following spending shocks. However, neither the sign restrictions or the conventional recursive approach provides conclusive evidence for tax shocks. Thus, we find that the analysis of net tax levels is an inadequate measure for tax effects in Norway, as tax changes in Norway predominantly focus on marginal tax rates and taxation structures. Keywords – Fiscal policy, Macroeconomics, VAR, Sign restriction

Perceptions of Crime in a Dreadful Enclosure

Author Institution: Department of Criminology; Department of Criminology; School of Criminology, Florida State UniversityThe environmental context for this research is Alumni Village, a married student housmg complex on the campus of Florida State University. Alumni Village was analyzed as an example of a dreadful enclosure which can be defined as a largescale housing estate or development which possesses a reputation as the home of thieves and cutthroats. Perceptions of the safety of the complex by its residents were obtained through use of a set of mental maps which were constructed by resident respondents. The method utilized in this study was derived in large part from Kevin Lynch's (1960) urban image delineation methodology. An analysis of the match between perceptions as recorded in mental maps and a known crime measure was carried out. Conclusions were drawn about policy improvements on the part of both the policing service and the management service for the complex