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Item Restricted Dynamics fiscal shocks and output effects in the PHilippines: 1986-2010(2011-04) Dulay, Dean Gerard; Santos, PAtrick Allen; Carlos, Fidelina N.This paper illustrates the dynamic effects of changes in government spending and taxation on the aggregate economy from 1986 to This This work follows closely the Blanchard of Perotti and Perotti (2002) by incorporating institutional information on Vector Autoregression structural Vector Autoregression study with impact Response Function. The Impulse Response Function. The study uses quarterly macroeconomic data from the first quarter of 1986 up to the fourth quarter of 2010 and employs an output variable, a revenue variable, a The variable, and an investments variable. The results show that the response of output to spending is positive while The response of output to taxes is negative. The results also show that the effects of both spending and Turning on output are magnified using the abridged series. Turning to the effects of spending and taxes on investments, we see that both spending and tax shocks lead to negative output shocks. Keynesian theory, while The about the sign, predicts that these variables move in opposite effects. The results contrast the theory.