This paper investigates the size of Italian fiscal multipliers under different business-cycle phases over the period 1872–2006. Using pre-WWII public defense expenditures as an instrument of total expenditures, we quantify the magnitude of the fiscal multiplier. Controlling for the business...

Many countries have deployed substantial fiscal packages to cushion the economic fallout from the COVID-19 pandemic. A historical look at past pandemics and epidemics highlights concomitant public sector support in response to health crises. This paper assesses how fiscal multipliers could vary...

Martin Feldstein claimed taxation increases investment return, and the increase changes in multiple rate. If his theory is correct, Feldstein should pay 100% tax to obtain infinite nominal capital return. This paper disproves Feldstein’s tax multiplier

We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...

Using a panel of 33 OECD countries we estimate government spending multipliers for 11 different categories (functions) of spending: General Public Services, Defense, Public Order and Safety, Transport & Communication, Economic Services, Environment Protection, Housing and Community Amenities,...

An essential dilemma in economics that has yielded ambiguous answers is whether governments should spend more in recessions. This paper provides an extension of the work of Ramey & Zubairy (2018) for the US economy according to which the government spending multipliers are below unity,...

We study empirically how various labor market institutions – (i) union density, (ii) unemployment benefit remuneration, and (iii) employment protection – shape fiscal multipliers and output volatility. Our theoretical model highlights that more stringent labor market institutions attenuate...

This paper investigates the role of informality in affecting the magnitude of the fiscal multiplier in a panel of 141 countries, using the local projections method. We find a strong negative relationship between the degree of informality and the size of the fiscal multiplier. This result holds...

We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data come from household-level retail purchases in the Nielsen scanner data and auto purchases from Equifax credit balances. We...

This paper analyzes the effects of time-varying fiscal policy behavior on output and consumption multipliers within a monetary union. The framework is that of a standard New Keynesian twocountry model with distortionary taxes and Calvo price rigidities. I first show that multipliers differ...