Fiscal Multipliers and the State of the Economy
By Anja Baum, Marcos Poplawski-Ribeiro, A. Weber. Social Science Research Network, 2012
368 citations recorded by the source corpus.
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.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/b3da41a58036f8725473738021770306d0183419
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
Citations in the corpus
- Austerity versus Stimulus? Understanding Fiscal Policy Change at the International Monetary Fund Since the Great Recession (2015, background): “…fiscal policy is genuinely expansionary and that mild and backloaded austerity packages would have fewer contractionary effects than sharp and frontloaded ones (IMF 2010; Ball et al 2011; Guajardo et al 2011; Baum et al 2012; Erceg and Linde 2012; Batini and Melina 2012; Blanchard and Leigh 2013).”
- Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies (2012, neutral): “The evidence in Baum et al. (2012) confirms this view.”
- Government Spending Multipliers in Good Times and in Bad: Evidence from US Historical Data (2014, neutral): “Auerbach and Gorodnichenko (2012), Bachmann and Sims (2012), Baum et al. (2012), Auerbach and Gorodnichenko (2013), Fazzari et al. (2013) and Riera-Crichton et al. (2014)). Another strand of the literature considers how monetary policy affects government spending multipliers. New Keynesian DSGE mode”
- Fiscal developments and financial stress: a threshold VAR analysis (2017, neutral): “Higher multipliers in recessions were also reported in Baum et al. (2012), Batini et al. (2012), Mittnik and Semmler (2012) and others.”
- Successful Austerity in the United States, Europe and Japan (2012, neutral): “…Statistics Bureau, Japan; Gross domestic product: Statistics Bureau, Japan; GDP deflator: Statistics Bureau, Japan; Government total receipts: Baum et al. (2012); Transfer payments: Baum et al. (2012); Government interest payments: Baum et al. (2012); Population: Statistics Bureau,…”