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What Determines Government Spending Multipliers?

Corsetti, Giancarlo; Meier, André; Müller, Gernot - C.E.P.R. Discussion Papers - 2012

This paper studies how the effects of government spending vary with the economic environment. Using a panel of OECD countries, we identify fiscal shocks as residuals from an estimated spending rule and trace their macroeconomic impact under different conditions regarding the exchange rate...

Persistent link: https://www.econbiz.de/10011083665

New Keynesian versus old Keynesian government spending multipliers

Cogan, John F.; Cwik, Tobias; Taylor, John B.; Wieland, … - C.E.P.R. Discussion Papers - 2009

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy...

Persistent link: https://www.econbiz.de/10004961429

Does austerity pay off?

Born, Benjamin; Müller, Gernot; Pfeifer, Johannes - C.E.P.R. Discussion Papers - 2015

We ask whether cuts of government consumption lower or raise the sovereign default premium. To address this question, we set up a new data set for 38 emerging and advanced economies which contains quarterly time-series observations for sovereign default premia, government consumption, and...

Persistent link: https://www.econbiz.de/10011168905

Mafia and Public Spending: Evidence on the Fiscal Multiplier from a Quasi-experiment

Acconcia, Antonio; Corsetti, Giancarlo; Simonelli, Saverio - C.E.P.R. Discussion Papers - 2011

We estimate the multiplier relying on differences in spending in infrastructure across Italian provinces and an … on cross sectional data allow us to address common problems in time series analysis, such as the risk of estimating … spuriously high multipliers because of endogeneity and reverse causation, or the risk of confounding the effects of fiscal and …

Persistent link: https://www.econbiz.de/10008925709

Government Spending Shocks in Open Economy VARs

Forni, Mario; Gambetti, Luca - C.E.P.R. Discussion Papers - 2014

We identify government spending news and surprise shocks using a novel identification based on the Survey of Professional Forecasters. News shocks lead to an increase of the interest rate, a real appreciation of US dollar and a worsening of the trade balance. The opposite is found for the...

Persistent link: https://www.econbiz.de/10011083743

Estimating the Effects of Fiscal Policy in OECD Countries

Perotti, Roberto - C.E.P.R. Discussion Papers - 2005

This Paper studies the effects of fiscal policy on GDP, inflation and interest rates in five OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows: 1) The effects of fiscal policy on GDP tend to be small: government spending multipliers...

Persistent link: https://www.econbiz.de/10005124359

Non-Separable Preferences and Frisch Labor Supply: One Solution to a Fiscal Policy Puzzle

Bilbiie, Florin Ovidiu - C.E.P.R. Discussion Papers - 2009

This paper proposes a theoretical explanation of the empirical finding that private consumption increases in response to an increase in government spending. The explanation requires two ingredients. First, labor demand expands (e.g. prices are sticky). Second, general non-separable preferences...

Persistent link: https://www.econbiz.de/10008459766

A Theory of Countercyclical Government-Consumption Multiplier

Michaillat, Pascal - C.E.P.R. Discussion Papers - 2012

This paper proposes a dynamic stochastic general equilibrium model in which the government-consumption multiplier …

Persistent link: https://www.econbiz.de/10011083889

Fiscal Policy in a Depressed Economy: Was There a 'Free Lunch' in 1930s' Britain?

Crafts, Nicholas; Mills, Terence C - C.E.P.R. Discussion Papers - 2013

We report estimates of the fiscal multiplier for interwar Britain based on quarterly data and time-series econometrics …. We find that the government-expenditure multiplier was in the range 0.3 to 0.9 even during the period when interest rates …

Persistent link: https://www.econbiz.de/10011084469

Understanding the Effects of Government Spending on Consumption

Galí, Jordi; López-Salido, J David; Vallés Liberal, … - C.E.P.R. Discussion Papers - 2005

Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how...

Persistent link: https://www.econbiz.de/10005497708