The Effectiveness of Fiscal Policy in Stimulating Economic Activity: A Review of the Literature
By R. Hemming, Michael W. Kell, Selma Mahfouz. Social Science Research Network, 2002
499 citations recorded by the source corpus.
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/75ca47f2d733735e3bf7e1236466c7815781e019
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In Economics and Econometrics
- Ricardo J. Caballero
- Arvind Krishnamurthy
- J. Tenhofen
- Kirsten H. Heppke-Falk
- Guntram B. Wolff
- Claudio E. Raddatz
- Enrique G. Mendoza
- Emmanuel Farhi
Citations in the corpus
- Fiscal Policy and Financial Depth (2004, background): “See also, e.g., Alesina and Perotti (1995), Giavazzi and Pagano (1996), and Hemming et al (2002).”
- Trade Spill-Overs of Fiscal Policy in the European Union: A Panel Analysis (2006, unknown): “For recent surveys of the potential ways in which fiscal policy changes affect economic activity, see Hemming et al. (2002) or Andersen (2004).”
- The Macroeconomic Effects of Exogenous Fiscal Policy Shocks in Germany: A Disaggregated SVAR Analysis (2006, methodology): “Regarding the model based studies, he refers to an overview article by Hemming et al. (2002).”
- Reinventing fiscal policy (2003, unknown): “Some have argued that in terms of model uncertainty, there is evidence that longer and more uncertain lags have prevailed recently than it was thought the case previously (Hemming, Kell, and Mahfouz, 2002, p. 8).”
- The Effects of Fiscal Policy in Italy: Evidence from a VAR Model (2007, unknown): “For example, in the model presented by Holmund (1997) an increase in the average public wage or employment, by increasing the reservation utility of private sector workers and their bargaining power, leads to an increase in the average private sector wage and a reduction in private sector employment”
- Government Size, Composition, Volatility and Economic Growth (2008, unknown): “7 For a survey on fi scal policy and economic growth see Zagler and Durnecker (2003), while Hemming et al. (2002) review the effectiveness of fi scal policy in economic activity.”