This study analyses the fiscal policy reacting to the cyclical macroeconomic environments in some developed countries over the past decades. We utilize several popular macroeconomic models for analyzing and evaluating the effects of fiscal policies: namely, the primary balance model and the cyclically-adjusted primary balance model. To understand the general effectiveness of fiscal policy, we adopt the time-varying VAR model to show its impulse responses for analyzing the effects of the policy on output. Our results indicate that whether it is the primary balance model or the cyclically-adjusted primary balance model, the fiscal policy has a counter-cyclicality. Additionally, the effects of fiscal policy are dramatic different if one use alternative ways to calculate the output gaps. We also find that the results of policy evaluation perform considerable dissimilar, if the different definitions of cyclically adjusted budget balances are applied. Finally, an increase in government spending results in a negative impact on their output for most economies except Australia when one employs the time-varying impulse response function.

Chapter 1.　Introduction　1
Chapter 2.　The Model　7
Chapter 3.　Data and Output Gaps　15
Chapter 4.　Empirical Results　19
Chapter 5.　Conclusion　23
Appendix A　Time-Varying Vector Autoregressive Model　25
Appendix B　Unit Root Test　27
Appendix C Fiscal policy behavior based on general government expenditure and revenue　29

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