## A Simple Method to Compute Fiscal Multipliers

_IMF Working Papers, June 9, 2014_

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## Bibliographic details
- Authors: Nicoletta Batini
- Published: June 9, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498357999.001

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### Summary and purpose
- Fiscal multipliers are important tools for macroeconomic projections and policy design.
- Data limitations in many countries restrict empirical research on the size of multipliers.
- The paper proposes a simple method—dubbed the “bucket approach”—to produce reasonable multiplier estimates for such countries.
- The approach groups countries into buckets with similar multiplier values, based on their characteristics, and accounts for temporary factors such as the state of the business cycle.

### Method: the "bucket approach"
- Groups (or “buckets”) countries into sets with similar multiplier values based on observable characteristics.
- Incorporates the effect of temporary factors, explicitly mentioning the state of the business cycle as an example of such factors.

### Key findings and contributions
- Provides a pragmatic technique to estimate fiscal multipliers when detailed country-specific empirical analysis is not feasible due to data constraints.
- Emphasizes comparability across countries by using shared characteristics to assign multiplier values.
- Highlights the importance of adjusting multipliers for temporary influences (for example, cyclical conditions).

### Policy implications and usage
- Offers policymakers and forecasters a usable framework to assign multiplier values in the absence of detailed empirical estimates.
- Suggests that multiplier estimates should be adjusted for cyclical and other temporary factors to improve projection accuracy and policy design.

*IMF Working Paper: "A Simple Method to Compute Fiscal Multipliers" by Nicoletta Batini, Working Paper No. 2014/093 (June 9, 2014).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/a-simple-method-to-compute-fiscal-multipliers-41627_