WebWe document that government spending multipliers depend on the population age structure. Using the variation in military spending and birth rates across US states, we show that the local fiscal multiplier is 1.5 and increases with the population share of young people, implying multipliers of 1.1–1.9 in the interquartile range. WebFiscal multipliers differ across countries because the structure and behaviour of economies differ. They also differ within countries, depending on factors such as the fiscal instrument implemented, the policy response to fiscal innovations, and expectation formation by economic agents. Much of the recent literature on fiscal multipliers also
Sticky wages, private consumption, and Fiscal multipliers
WebJun 1, 2024 · We estimate an on-budget fiscal multiplier of 1.0 and a credit multiplier of 0.2 during 2000–2024. The credit multiplier has decreased since the Global Financial Crisis. … WebDec 1, 2024 · While there is a substantial body of empirical research on the size of fiscal policy multipliers, there has been relatively less theoretical work on the issue. 1 This paper presents the theoretical underpinnings of a mechanism that relies only on sticky wages and prices, which can lead to fiscal policy output multipliers that are greater than … tsiatsia searching for connection
What drives the short-run costs of fiscal consolidation?
WebJan 31, 2024 · Expansionary fiscal policies are associated with large multipliers during credit bust episodes, and spending increases likewise foster economic growth in periods … Webconcerns about sovereign credit risk, raises economy-wide borrowing cost, and reduces private domestic demand. The paper documents empirically the relevance of these two channels using an Interactive Panel Vector Auto Regression model. It finds that fiscal multipliers tend to be smaller when fiscal positions are weak than strong. WebSep 8, 2016 · Date Written: September 8, 2016 Abstract This paper studies the differences between fiscal multipliers in OECD economies across the credit cycle. Impulse … phil vickery moussaka