IMF Working Papers

Fiscal Multipliers and Institutions in Peru: Getting the Largest Bang for the Sol

By Svetlana Vtyurina, Zulima Leal

July 22, 2016

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Svetlana Vtyurina, and Zulima Leal. Fiscal Multipliers and Institutions in Peru: Getting the Largest Bang for the Sol, (USA: International Monetary Fund, 2016) accessed September 18, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

With the end of the commodity super cycle, Peru’s potential growth has declined, raising questions of what government policies could do to help boost growth, including over the medium-term. Our econometric analysis shows that public investment multipliers have a larger effect on growth than current spending or tax-related stimulus in the short and medium terms. Peru’s low debt and financial savings grants fiscal space for increasing investment spending, which could also entice and complement private investment, provided the former is efficient, fiscally sustainable and complemented by further reforms in public investment management and changes to the decentralization framework.

Subject: Capital spending, Current spending, Expenditure, Infrastructure, National accounts, Public investment and public-private partnerships (PPP), Public investment spending

Keywords: Capital spending, Current spending, Decentralization, Fiscal policy, Fiscal sustainability, Global, Infrastructure, Infrastructure gap, Investment, Investment project, Investment promotion initiative, Investment spending, Management play, Multipliers, Nonlinear models, Peru, Private sector investment, Public investment and public-private partnerships (PPP), Public investment management, Public investment spending, Spending, WP

Publication Details

  • Pages:

    24

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2016/144

  • Stock No:

    WPIEA2016144

  • ISBN:

    9781498381017

  • ISSN:

    1018-5941