A Simple Method to Compute Fiscal Multipliers

Author/Editor: Nicoletta Batini ; Luc Eyraud ; Anke Weber
Publication Date: June 09, 2014
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Summary: Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. For these countries, we propose a simple method—dubbed the “bucket approach”—to come up with reasonable multiplier estimates. The approach bunches countries into groups (or “buckets”) with similar multiplier values, based on their characteristics. It also takes into account the effect of some temporary factors, such as the state of the business cycle.
Series: Working Paper No. 14/93
Subject(s): Fiscal stimulus and multipliers | Business cycles | Fiscal consolidation | Fiscal policy | Monetary policy

Publication Date: June 09, 2014
ISBN/ISSN: 9781498357999/1018-5941 Format: Paper
Stock No: WPIEA2014093 Pages: 33
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