{
  "title": "Fiscal Multipliers",
  "publication": "IMF Staff Position Notes, May 20, 2009",
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  "summary": "This paper provides background information for policymakers on fiscal multipliers, including quantitative estimates. The fiscal multiplier is the ratio of a change in output to an exogenous change in the fiscal deficit with respect to their respective baselines.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- Provides background information for policymakers on fiscal multipliers, including quantitative estimates.\n- Defines the fiscal multiplier as the ratio of a change in output to an exogenous change in the fiscal deficit with respect to their respective baselines.\n- Emphasizes that past research on multiplier estimates can guide current estimates, but judgment based on current conditions is important."
    },
    {
      "heading": "Key findings on multiplier size and behavior",
      "content": "- The size of the multiplier is larger if:\n  - leakages are few;\n  - the monetary conditions are accommodative;\n  - the country’s fiscal position after the stimulus is sustainable.\n- Fiscal expansions can be contractionary if they decrease consumers’ and investors’ confidence, especially if the fiscal expansion raises, or reinforces, fiscal sustainability concerns.\n- The degree of financial market development has an ambiguous effect on multipliers, depending on how financial development affects liquidity constraints and the government’s ability to finance the fiscal deficit.\n- Fiscal multipliers have been calculated for some countries but should be carefully re-examined considering the current events."
    },
    {
      "heading": "Policy implications and guidance",
      "content": "- Use past research as a starting point for multiplier estimates, but apply judgment informed by current economic, monetary, financial market, and fiscal-sustainability conditions.\n- Ensure monetary policy accommodation and minimize leakages to increase the effectiveness of fiscal stimulus.\n- Consider fiscal sustainability and confidence effects: design fiscal expansions to avoid reinforcing investor and consumer concerns that could offset stimulus effects."
    },
    {
      "heading": "Methodological and contextual notes",
      "content": "- Multiplier defined relative to baselines for output and exogenous changes in the fiscal deficit.\n- The ambiguous role of financial market development implies that country-specific analysis is necessary, particularly in assessing liquidity constraints and financing capacity.\n- Re-examination of existing multiplier estimates is recommended in light of changing economic circumstances.\n\n---\n\n Content in this bundle\n\n- spn0911\n  - spn0911 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - spn0911 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-staff-position-notes/issues/2016/12/31/fiscal-multipliers-22963"
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    "Authors: Antonio Spilimbergo, Martin Schindler, Steven A. Symansky",
    "Published: May 20, 2009",
    "Series: IMF Staff Position Notes",
    "DOI: https://doi.org/10.5089/9781462372737.004",
    "Provides background information for policymakers on fiscal multipliers, including quantitative estimates.",
    "Defines the fiscal multiplier as the ratio of a change in output to an exogenous change in the fiscal deficit with respect to their respective baselines.",
    "Emphasizes that past research on multiplier estimates can guide current estimates, but judgment based on current conditions is important.",
    "The size of the multiplier is larger if:",
    "Fiscal expansions can be contractionary if they decrease consumers’ and investors’ confidence, especially if the fiscal expansion raises, or reinforces, fiscal sustainability concerns.",
    "The degree of financial market development has an ambiguous effect on multipliers, depending on how financial development affects liquidity constraints and the government’s ability to finance the fiscal deficit.",
    "Fiscal multipliers have been calculated for some countries but should be carefully re-examined considering the current events.",
    "Use past research as a starting point for multiplier estimates, but apply judgment informed by current economic, monetary, financial market, and fiscal-sustainability conditions.",
    "Ensure monetary policy accommodation and minimize leakages to increase the effectiveness of fiscal stimulus.",
    "Consider fiscal sustainability and confidence effects: design fiscal expansions to avoid reinforcing investor and consumer concerns that could offset stimulus effects.",
    "Multiplier defined relative to baselines for output and exogenous changes in the fiscal deficit.",
    "The ambiguous role of financial market development implies that country-specific analysis is necessary, particularly in assessing liquidity constraints and financing capacity.",
    "Re-examination of existing multiplier estimates is recommended in light of changing economic circumstances.",
    "**_spn0911**"
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