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Fiscal Multipliers and the State of the Economy

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, ca...

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Bibliographic Details
Main Author: Baum, Anja
Other Authors: Poplawski Ribeiro, Marcos, Weber, Anke
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2012
Series:IMF Working Papers
Subjects:
Public Finance & Taxation
Output Gap
Fiscal Multipliers
Fiscal Policy
Production
Fiscal Consolidation
Quantitative Policy Modeling
National Government Expenditures And Related Policies: General
Expenditure
Macroeconomics: Production
Cycles
Expenditures, Public
Macroeconomics
Business Fluctuations
Economic Theory
Public Finance
Production And Operations Management
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary: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 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
Physical Description:31 pages
ISBN:9781475565829

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