IMF Working Papers

Fiscal Multipliers in Mongolia

By Tigran Poghosyan

May 23, 2025

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Format: Chicago

Tigran Poghosyan. "Fiscal Multipliers in Mongolia", IMF Working Papers 2025, 101 (2025), accessed June 19, 2025, https://doi.org/10.5089/9798229008846.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Fiscal policy plays an important macroeconomic role in Mongolia. On the one hand, fiscal expansion is seen as a measure to boost aggregate demand. On the other hand, import leakages mitigate the impact of fiscal expansion on growth. Applying a structural vector autoregressive model, this paper finds that Mongolia’s total spending and revenue multipliers are below 1, peaking at 0.3 and -0.1, respectively. The lower than 1 multiplier can be explained by import leakages in Mongolia. Capital spending multiplier peaks at 0.6, exceeds and remains more persistent than the current spending multiplier, suggesting that public investment is more efficient in boosting growth than current spending. Tax revenue and non-tax revenue multipliers peak at -0.1 and -0.2, respectively, and are short-lived. Revenue multipliers are broadly comparable in size, but their assessment is challenging due to lack of sizeable tax policy measures in Mongolia.

Subject: Capital spending, Current spending, Expenditure, Fiscal multipliers, Fiscal policy, Revenue administration

Keywords: Capital spending, Current spending, Fiscal Multipliers, Global, IMF working paper Asia, Import leakage, Mongolia, Revenue multiplier, Spending multiplier, Spending multiplier, Structural VAR

Publication Details

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