Fiscal Multipliers for Brazil

Author/Editor:

Troy D Matheson ; Joana Pereira

Publication Date:

March 25, 2016

Electronic Access:

Free Download. 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:

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.

Series:

Working Paper No. 2016/079

Subject:

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

English

Publication Date:

March 25, 2016

ISBN/ISSN:

9781484307892/1018-5941

Stock No:

WPIEA2016079

Pages:

16

Please address any questions about this title to publications@imf.org