한국경제성장연구원
Korea Economic Growth Institute

This study investigates the effectiveness of Korea's fiscal policy for economic stabilization, focusing on state dependency. Using the Auerbach and Gorodnichenko (2013)’s model, the analysis addresses short-term government expenditure data by components and identifies forecast errors to capture unexpected expenditure changes. Results show that fiscal policy is more effective in slack, with a higher multiplier effect in slack than in boom. Unexpected government expenditure shocks are more impactful than anticipated changes. Among components, government investment expenditure yields the highest multiplier effect, with direct government purchases proving the most effective, surpassing unity in impact compared to other types of expenditure.