Cookies?
Library Header Image
LSE Research Online LSE Library Services

How big (small?) are fiscal multipliers?

Ilzetzki, Ethan and Mendoza, Enrique G. and Végh Gramont, Carlos A. (2011) How big (small?) are fiscal multipliers? Working Paper, 11/52. International Monetary Fund. ISBN 9781455218028

Full text not available from this repository.

Identification Number: 11/52

Abstract

We contribute to the intense debate on the real effects of fiscal stimuli by showing that the impact of government expenditure shocks depends crucially on key country characteristics, such as the level of development, exchange rate regime, openness to trade, and public indebtedness. Based on a novel quarterly dataset of government expenditure in 44 countries, we find that (i) the output effect of an increase in government consumption is larger in industrial than in developing countries, (ii) the fisscal multiplier is relatively large in economies operating under predetermined exchange rate but zero in economies operating under flexible exchange rates; (iii) fiscal multipliers in open economies are lower than in closed economies and (iv) fiscal multipliers in high-debt countries are also zero.

Item Type: Monograph (Working Paper)
Official URL: http://www.imf.org
Additional Information: © 2011 International Monetary Fund
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 20 Feb 2012 12:17
Last Modified: 15 Jun 2017 11:26
URI: http://eprints.lse.ac.uk/id/eprint/41945

Actions (login required)

View Item View Item