Fiscal Multipliers in the ECCU

 
Author/Editor: Gonzalez-Garcia, Jesus ; Lemus, Antonio ; Mrkaic, Mico
 
Publication Date: May 22, 2013
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: The multipliers of taxes, and government consumption and investment expenditure for the Eastern Caribbean Currency Union (ECCU) are estimated using vector autoregression models with panel data. The impact and long-run multipliers are below unity, suggesting that a great extent of the intended impulse ends up expanding imported demand. The long-run multipliers of taxes and consumption expenditure are non-different from zero statistically, while public investment has a long-run multiplier of 0.6. The results suggest that countercyclical policies to stimulate growth should focus on public investment.
 
Series: Working Paper No. 13/117
Subject(s): Fiscal policy | Caribbean | Eastern Caribbean Currency Union | Economic models | Government expenditures

 
English
Publication Date: May 22, 2013
ISBN/ISSN: 9781484359914/2227-8885 Format: Paper
Stock No: WPIEA2013117 Pages: 17
Price:
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