Fiscal Multipliers and the State of the Economy |
|
Author:
| Baum, Anja Poplawski-Ribeiro, Marcos |
Series title: | IMF Working Papers |
ISBN: | 978-1-4755-2392-8 |
Publication Date: | Dec 2012 |
Publisher: | International Monetary Fund
|
Book Format: | Ebook |
List Price: | Contact Supplier contact
|
Book Description:
|
Only a few empirical studies have analyzed the relationship between fiscal multipliers and the underlying state of the economy. This paper investigates this link on a country-by-country basis for the G7 economies (excluding Italy). Our results show that fiscal multipliers differ across countries, calling for a tailored use of fiscal policy. Moreover, the position in the business cycle affects the impact of fiscal policy on output: on average, government spending, and revenue...
More DescriptionOnly a few empirical studies have analyzed the relationship between fiscal multipliers and the underlying state of the economy. This paper investigates this link on a country-by-country basis for the G7 economies (excluding Italy). Our results show that fiscal multipliers differ across countries, calling for a tailored use of fiscal policy. Moreover, the position in the business cycle affects the impact of fiscal policy on output: on average, government spending, and revenue multipliers tend to be larger in downturns than in expansions. This asymmetry has implications for the choice between an upfront fiscal adjustment versus a more gradual approach.