I show that an important determinant of the US tax multiplier is the direction of the tax change. The tax multiplier is significantly larger (in absolute value) for tax hikes than for tax cuts – regardless of whether I identify tax shocks via (i) the narrative approach or (ii)...

Do local fiscal multipliers depend on what the government purchases? We find that government purchases of services have larger effects on employment than spending on goods. Industries producing services are more labor-intensive than industries producing goods. This heterogeneity in labor...

This paper analyzes the effect of time-varying cross-country fiscal policy interaction on output and consumption multipliers in a monetary union. The framework is that of a standard New Keynesian two-country model with distortionary taxes and Markov Switching fiscal regimes. The paper uses a...

This paper highlights the importance of accounting for the protracted time frame over which fiscal policy is implemented, and over which its e®ects are felt, when estimating fiscal multipliers. It distinguishes published government tax/spending plans from subsequent outcomes, and it exploits...

Considering the recently revived debate on the role and effectiveness of public infrastructure investment, this paper seeks to cover a gap in the empirical literature. In particular, we aim to tackle the lack of analysis of fiscal multipliers for large public infrastructure projects in Italy at...

This paper empirically studies the U.S. multiplier effects of government investment, government consumption and total government purchases on output. We explore dependencies of the multipliers on states of the economy, measured in different ways. Using local projections with instrumental...

We show that the effectiveness of redistribution policy is tied to how much inflation it generates, and thereby to monetary‐fiscal adjustments that ultimately finance the transfers. In the monetary regime, taxes increase to finance transfers while in the fiscal regime, inflation rises,...

We estimate government spending multipliers in demand- and supply-driven recessions for the Euro Area. Multipliers in a moderately demand-driven recession are 2-3 times larger than in a moderately supply-driven recession, with the difference between multipliers being non-zero with very high...

In studying the economic cycle dependency of fiscal multipliers in Chile, we implement an independent component analysis for structural shock identification within a non-linear vector autoregressive setting with generalized impulse response functions. Thereby we relax more restrictive...