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Fiscal multipliers in Russia

Author

Listed:
  • Sergey Vlasov

    (Bank of Russia, Russian Federation)

  • Elena Deryugina

    (Bank of Russia, Russian Federation)

Abstract
The paper covers the theoretical and practical issues related to estimating fiscal multipliers for the Russian economy. The analysis of the main determinants affecting the size of multipliers suggests a relatively low effect of changes in fiscal variables on output growth. Estimation of the general government revenue and spending multipliers are generally in line with these expectations as well as with the results available for emerging market economies and stands at the values of - 0.75 and 0.28 respectively. The negative direct impact on GDP growth from the medium-term fiscal consolidation is estimated as relatively small (cumulatively about 0.3 percentage points through 2018-2020). Fiscal consolidation scheduled for the medium-term is expected to have a negative impact on output. However, since it is intended to be carried out mainly at the expense of the expenditure part of the budget, this should be less harmful to output growth and could promote greater efficiency in public spending. The direct impact from a reduction in expenditures can be fully offset by a significant positive indirect impact on GDP from an increase in confidence about long-term fiscal sustainability.

Suggested Citation

  • Sergey Vlasov & Elena Deryugina, 2018. "Fiscal multipliers in Russia," Bank of Russia Working Paper Series wps28, Bank of Russia.
    • Handle: RePEc:bkr:wpaper:wps28
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    Cited by:

    1. Ekaterina Pyltsyna, 2018. "The Change Of Fiscal Multiplier When Switching From Managed Exchange Rate Regime To Thefloating One," HSE Working papers WP BRP 206/EC/2018, National Research University Higher School of Economics.
    2. V. A. Malakhov & K. V. Nesytykh, 2022. "Russia’s Long-Term Macroeconomic Losses and Benefits from the Low-Carbon Development of the World and Domestic Energy Industry," Studies on Russian Economic Development, Springer, vol. 33(4), pages 392-401, August.
    3. Anton I. Votinov & Maria A. Elkina, 2018. "Estimation of Fiscal Stimulus Efficiency in Russian Economy: Simple DSGE Model With Government Sector," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 83-96, October.
    4. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    5. Samvel S. Lazaryan & Maria A. Elkina, 2021. "Financial Sector’s Role in Transmission of Monetary and Fiscal Shocks in Russian Economy: Estimation Under Different Assumptions About Production Sector," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 25-53, December.
    6. E. O. Matveev & I. A. Sokolov, 2024. "Application of VAR Models to Assess the Impact of Budget Expenditures on GDP Dynamics," Studies on Russian Economic Development, Springer, vol. 35(5), pages 657-666, October.
    7. Sayed O. M. Timuno & Joel Hinaunye Eita & Lanouar Charfeddine, 2020. "Towards an effective fiscal stimulus: Evidence from Botswana," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1790948-179, January.
    8. Samvel S. Lazaryan & Maria A. Elkina, 2018. "Estimation of the Government Expenditures Multiplier in the Republic of Armenia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 21-31, August.
    9. Sergey Vlasov, 2018. "Impact of the fiscal manoeuvre on GDP growth: estimation of short-term effects using fiscal multipliers," Bank of Russia Working Paper Series note17, Bank of Russia.

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    More about this item

    Keywords

    fiscal multipliers; general government revenue; general government spending; Russia; Structural BVAR;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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