A Simple Method to Compute Fiscal Multipliers

Nicoletta Batini, Luc Eyraud and Anke Weber

No 2014/093, IMF Working Papers from International Monetary Fund

Abstract: 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. For these countries, we propose a simple method—dubbed the “bucket approach”—to come up with reasonable multiplier estimates. The approach bunches countries into groups (or “buckets”) with similar multiplier values, based on their characteristics. It also takes into account the effect of some temporary factors, such as the state of the business cycle.

Keywords: WP; spending; multiplier; government spending; Fiscal policy; fiscal multipliers; fiscal multiplier; spending shock; multipliers in EME; stance factor; Exchange rate arrangements; Automatic stabilizers (search for similar items in EconPapers)
Pages: 33
Date: 2014-06-09
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Citations: View citations in EconPapers (61)

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