The Fiscal Multiplier of European Structural Investment Funds: Aggregate and Sectoral Effects with an Application to Slovenia
IMF Working Papers, April 30, 2021
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- The Fiscal Multiplier of European Structural Investment Funds: Aggregate and Sectoral Effects with an Application to Slovenia
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Bibliographic details
- Authors: Raphael A Espinoza
- Published: April 30, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513573762.001
Main objectives and scope
- Estimate aggregate and sectoral fiscal multipliers of EU Structural Investment (ESI) Funds and of public investment at the EU level.
- Complement aggregate results with a specific application to Slovenia.
- Analyze country heterogeneity and the effects of different types of public investment and of public investment across economic sectors.
Key empirical findings
- Positive shocks to ESI Funds are followed by an increase in output that ranges from:
- 1.2 percent on impact, to
- 1.8 percent after 1 year.
- Positive shocks are followed by an increase in private investment between 0.7 and 0.8 percent of GDP.
- Aggregate analysis finds large and significant multipliers and strong crowding-in of private investment.
Country heterogeneity
- Countries were divided according to characteristics known to affect multipliers.
- Higher multipliers are found in a group of CEE countries that are important recipients of European funds and are characterized by fixed exchange rate regimes and sound public investment governance (e.g. Croatia and Slovenia).
Sectoral and public investment type analysis
- The paper complements aggregate estimates by:
- Estimating the effect of different types of public investment.
- Estimating the effect of public investment on different sectors of the economy.
Publication metadata
- Author: Raphael A Espinoza
- Publication date: April 30, 2021
- Series: IMF Working Papers, Working Paper No. 2021/118
- Pages: 53
- DOI: https://doi.org/10.5089/9781513573762.001
Source: IMF Working Paper by Raphael A Espinoza, April 30, 2021.
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- Working Paper