TY - JOUR AU - Giavazzi,Francesco AU - Jappelli,Tullio AU - Pagano,Marco AU - Benedetti,Marina TI - Searching for Non-Monotonic Effects of Fiscal Policy: New Evidence JF - National Bureau of Economic Research Working Paper Series VL - No. 11593 PY - 2005 Y2 - September 2005 UR - http://www.nber.org/papers/w11593 L1 - http://www.nber.org/papers/w11593.pdf N1 - Author contact info: Francesco Giavazzi Universita' Bocconi and IGIER Via Guglielmo Rontgen, 1 Milan 20136 ITALY Tel: 0039-02-5836-3304 Fax: 0039-02-5836-3302 E-Mail: francesco.giavazzi@unibocconi.it Tullio Jappelli Department of Economics University of Naples Federico II Via Cinzia 45 80126 Napoli, Italy E-Mail: tullio.jappelli@unina.it Marco Pagano Department of Economics University of Naples Federico II Via Cintia, Monte S. Angelo 80126 Napoli, ITALY Tel: +390815752508 Fax: +390815752243 E-Mail: mrpagano@tin.it Marina Benedetti M2 - featured in NBER digest on 2005-09-12 AB - Data revisions and the availability of a longer sample offer the opportunity to reconsider the empirical findings that suggest that in the OECD countries national saving responds non-monotonically to fiscal policy. The paper confirms that the circumstance most likely to give rise to a non-monotonic response of national saving to a fiscal impulse is a "large and persistent impulse", defined as one in which the full employment surplus, as a percent of potential output, changes by at least 1.5 percentage points per year over a two-year period. This particular circumstance remains the only statistically significant one even when we allow for non-monotonic responses to arise when public debt is growing rapidly or interest rate spreads are widening. We find that non-monotonic responses are similar for fiscal contractions and expansions. In particular, an increase in net taxes has no effect on national saving during large fiscal contractions or expansions. For government consumption there is a large, albeit in some specifications less then complete, offset during expansions or contractions. ER -