How to order
IMF Publications

Working Papers in full text
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 All


Other research-related activities and publications of the IMF can be found at IMF Research

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile



What Determines Government Spending Multipliers?

Author/Editor: Corsetti, Giancarlo | Meier, André | Müller, Gernot
Authorized for Distribution: June 1, 2012
Electronic Access: Free Full Text (PDF file size is 1,077KB)
Use the free Adobe Acrobat Reader to view this PDF file.
 
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: 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 regime, public indebtedness, and health of the financial system. The unconditional responses to a positive spending shock broadly confirm earlier findings. However, conditional responses differ systematically across exchange rate regimes, as real appreciation and external deficits occur mainly under currency pegs. We also find output and consumption multipliers to be unusually high during times of financial crisis.
 
Order a print copy
Series: Working Paper No. 12/150
Subject(s): Budget deficits | Cross country analysis | Currency pegs | Exchange rate regimes | Financial crisis | Fiscal policy | Government expenditures | Public debt
Author's keyword(s): Multiplier | fiscal policy | financial crisis | government spending | public finances | exchange rate regime
 
English  
    Published:   June 1, 2012        
            Format:   Paper
    Stock No:   WPIEA2012150   Pages:   45
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
Please address any questions about this title to publications@imf.org.