Fiscal Multipliers for Brazil

March 25, 2016

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Format: Chicago

Troy D Matheson, and Joana Pereira. Fiscal Multipliers for Brazil, (USA: International Monetary Fund, 2016) accessed September 18, 2024

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

We find historical fiscal multipliers for Brazil around 0.5, larger than what existing literature typically identifies for the average emerging market. However, spending and public credit multipliers seem to have dropped to near zero since the global financial crisis, as the estimate for the whole sample period (1999-2014) is about ½ of that for precrisis years. By contrast, revenue multipliers have remained broadly stable. We conclude that fiscal consolidations based on expenditure and public credit retrenchment are likely to entail a modest drag on growth in the near term.

Subject: Bank credit, Credit, Expenditure, Financial institutions, Fiscal multipliers, Fiscal policy, Money, State-owned banks

Keywords: Credit, Credit increase, Credit multiplier, Credit shock, Credit supply, Discretionary spending, Expenditure series, Fiscal multipliers, Fiscal policy, Global, Policy lending, Public credit, Revenue, Revenue multiplier, Spending increase, State-owned banks, WP

Publication Details

Pages:

16
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/079
Stock No:

WPIEA2016079
ISBN:

9781484307892
ISSN:

1018-5941

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