How to order
IMF Publications

Working Papers in full text
2015 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

Growth Forecast Errors and Fiscal Multipliers

Author/Editor: Olivier J. Blanchard | Daniel Leigh
Authorized for Distribution: January 3, 2013
Electronic Access: Free Full Text (PDF file size is 1,138KB)
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 investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis.
Order a print copy
Series: Working Paper No. 13/1
Subject(s): Economic growth | Fiscal policy | Government expenditures | Economic forecasting | Economic models
    Published:   January 3, 2013        
    ISBN/ISSN:   9781475576443/1018-5941   Format:   Paper
    Stock No:   WPIEA2013001   Pages:   43
    Price:   US$18.00
Please address any questions about this title to