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

By Nicoletta Batini, Luc Eyraud, Lorenzo Forni, Anke Weber

October 2, 2014

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Format: Chicago

Nicoletta Batini, Luc Eyraud, Lorenzo Forni, and Anke Weber. Fiscal Multipliers: Size, Determinants, and Use in Macroeconomic Projections, (USA: International Monetary Fund, 2014) accessed September 19, 2024

Disclaimer: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. This note provides general guidance on the definition, measurement, and use of fiscal multipliers. It reviews the literature related to their size, persistence and determinants. For countries where no reliable estimate is available, the note proposes a simple method to come up with reasonable values. Finally, the note presents options to incorporate multipliers in macroeconomic forecasts.

Subject: Automatic stabilizers, Expenditure, Fiscal consolidation, Fiscal multipliers, Fiscal policy, Output gap, Production

Keywords: 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

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Technical Notes and Manuals No. 2014/004
Stock No:

TNMEA2014004
ISBN:

9781498382458
ISSN:

2075-8669

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