Fiscal Policy Effects on Private Expenditure for Sustainable Economic Growth: A Panel VAR Study from Selected Developing Countries

Round 1

Reviewer 1 Report

Dear Authors,

the paper is interesting and original ... however, significant improvements are necessary as below detailed:

1) database refer to the period 1990-2012 ... an extension including data of more recent years is requested;

2) in an Appendix a list of countries is absolutely necessary;

3) you shoud better clarify the trasmission mechanisms in your econometric specifications, and especially the role played by interest rate changes ...

4) section 6, regarding robustness check should be extended;

5) citations of the relevant literature shoud be extended ...

Author Response

The comments have been addressed successfully

Author Response File: Author Response.pdf

Reviewer 2 Report

Referee Report

sustainability-1790708

“The Effects of Fiscal Policy on Private Expenditure: A Panel VAR Study from Selected Developing Countries for Sustainable Economic Growth”

This paper could be interesting for the researchers in “open economy macroeconomics and development economics”.  The paper simply investigates impact of fiscal policy on private expenditure.  Author(s) use a panel of 60 countries and a total of 23 years between 1990 to 2012.  Authors find defense expenditure positively crowds out private expenditure and domestic income.  The present study is an empirical study that supports all the arguments presented and adequately convincing.

 

My comments:

1)      First of all the reduced form model suffers from a lack of explanation. The selected model(?) has to be explained and justified rather than a mere introduction. How and why the equation is formed?

 

2)      Every single variable included needs to be based on economic theory and then explained. The typical other variables that may be considered are some macroeconomic variables.

3)      Dataset and methodology do not seem to be clear.  Why is the dataset cut at 2012?

 

4)      Following the third comment, I would like author(s) to include the recent years (post 2012), up to 2021, if possible, into the dataset. To me the study is not reflecting the effects of many events such as recent pandemic etc.

 

5)      Variables; defense expenditure (LGDEF), economic expenditure (LGECO), social expenditure (LGSOC), private investment (LPI) and private consumption (LPC) are highly correlated to me.  How do authors explain this?

 

6)      The paper is missing a substantial literature review. The literature section is rather too short. I would suggest the author(s) to include some previous similar studies (especially major ones) to support their thesis what others have studied before and then based their arguments on top of that.

7)      It is essential that a new version of this paper highlights its contribution to the literature.

 

Minor Suggestions:

1)      Variables and sources of data should be provided in an appendix with the unit measurement of variables.

 

2)      It seems to me that the paper is not ready yet. It’s rather rushed and not too organized.

 

Author Response

The comments have been addressed successfully

Author Response File: Author Response.pdf

Reviewer 3 Report

Thank you so much for giving me the chance to review this paper. I have serious concerns about the sample period of the data. No doubt, the authors have justified it theoretically but authors seriously need to think about extending the sample period. The sample period ends in 2012 which is almost a decade old now. 

Author Response

The comments have been addressed successfully

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Is it not clear to me why extending the considered period - from 2012 to 2020 - the econometric results and the concluding section remain unchanged with respect to previous version ....

Please clarify

Author Response

Dear reviewer,

Thank you very much for your comment. For your information, the data set of this study is unbalanced data. There are countries that are incomplete with the latest data from 2012-2020. This caused the econometric estimation results, especially in the impulse response function are not much different from the previous version. However, the coefficients value and variance decompositions results are different from previous version. Therefore, based on the impulse response function results which are not much different from the previous version, there is no significant difference in the conclusion section. With this explanation, we deeply appreciate your consideration of our manuscript to be published in Sustainability.

Reviewer 2 Report

Referee Report

sustainability-1790708

“The Effects of Fiscal Policy on Private Expenditure: A Panel VAR Study from Selected Developing Countries for Sustainable Economic Growth”

In my previous report, I put forth some major and minor comments and the author(s) mainly addressed those in the present revised copy of the manuscript.

 In fact, many of my major suggestions completely fulfilled in the new version: the author(s) added the necessary clarification and explanation in details for the regarding data and its associated tables showing the results.

 Overall, I suggest publishing this article in the sustainability after a re-reading in order to check all the possible mistakes.  

Author Response

Dear reviewer,

Thank you very much for your full consideration of our manuscript.

Reviewer 3 Report

The authors have addressed tye comments very well. Paper can be published now.

Author Response

Dear reviewer,

Thank you very much for your full consideration of our manuscript.

Round 3

Reviewer 1 Report

Authors explained the reasons for very similar results after extending sample period ...