## Fiscal Multipliers: Size, Determinants, and Use in Macroeconomic Projections

_Technical Notes and Manuals, October 2, 2014_

## Source details

**Canonical URL:** [Fiscal Multipliers: Size, Determinants, and Use in Macroeconomic Projections](https://www.imf.org/en/publications/tnm/issues/2016/12/31/fiscal-multipliers-size-determinants-and-use-in-macroeconomic-projections-41784)

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## Bibliographic details
- Authors: Nicoletta Batini, Lorenzo Forni
- Published: October 2, 2014
- Series: Technical Notes and Manuals
- DOI: https://doi.org/10.5089/9781498382458.005

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### Summary and purpose
- Fiscal multipliers are important tools for macroeconomic projections and policy design.
- Data availability limits the scope for empirical research in many countries, so little is known about the size of multipliers in those cases.
- The note provides general guidance on:
  - definition, measurement, and use of fiscal multipliers;
  - literature on multipliers' size, persistence, and determinants;
  - a simple method to obtain reasonable values where no reliable estimate exists;
  - options to incorporate multipliers in macroeconomic forecasts.

### Key findings from the note (literature review focus)
- Reviews the literature related to:
  - the size of fiscal multipliers;
  - the persistence of multiplier effects;
  - determinants of multipliers.
- Emphasizes heterogeneity across countries and episodes due to data limitations and differing structural characteristics.

### Method for countries without reliable multiplier estimates
- Proposes a simple method to come up with reasonable multiplier values when no reliable estimate is available.
- The method is presented as practical guidance for forecasters and policy designers facing limited empirical evidence.

### Incorporating multipliers in macroeconomic forecasts
- Presents options to incorporate fiscal multipliers in macroeconomic forecasts.
- Focuses on how multipliers can be used operationally in projection exercises and policy analysis.

### Subject coverage and keywords
- Subject areas: Automatic stabilizers, Expenditure, Fiscal consolidation, Fiscal multipliers, Fiscal policy, Output gap, Production.
- Keywords include: Fiscal consolidation, fiscal multiplier, fiscal multipliers, Fiscal policy, Global, government spending, multiplier estimate, multipliers in EME, Output gap, revenue management, shock effect, spending, spending shock, stance factor, TNM.

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_Source: https://www.imf.org/en/publications/tnm/issues/2016/12/31/fiscal-multipliers-size-determinants-and-use-in-macroeconomic-projections-41784_