Jump to ContentJump to Main Navigation
Post-crisis Fiscal Policy$
Users without a subscription are not able to see the full content.

Carlo Cottarelli, Philip Gerson, and Abdelhak Senhadji

Print publication date: 2014

Print ISBN-13: 9780262027182

Published to MIT Press Scholarship Online: September 2015

DOI: 10.7551/mitpress/9780262027182.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2017. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use (for details see http://www.mitpress.universitypressscholarship.com/page/privacy-policy).date: 15 December 2017

Size of Fiscal Multipliers

Size of Fiscal Multipliers

Chapter:
(p.315) 12 Size of Fiscal Multipliers
Source:
Post-crisis Fiscal Policy
Author(s):

Aiko Mineshima

Marcos Poplawski-Ribeiro

Anke Weber

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262027182.003.0013

This chapter focuses on the debate over the size of fiscal multipliers, which measure the impact of fiscal policy on output. The Great Recession has refocused attention on the effectiveness of fiscal policy multipliers, and there seems to be broad agreement that expansionary fiscal policy has a positive impact on growth, at least in the short term. However, it is unclear whether fiscal multipliers are larger or smaller than unity. Based on a comprehensive review of the literature, the chapter concludes that the size of first-year government spending multipliers lies between 0.3 and 1.0 during normal times, with revenue multipliers being significantly smaller. The size of multipliers tends to be influenced by a variety of factors, however, including the state of the economy, monetary policy stance, degree of trade openness, automatic stabilizers, and types of fiscal instruments used. In particular, multipliers could be significantly larger during economic downturns than during economic expansions. The finding has important policy implications for the design of fiscal adjustment plans.

Keywords:   fiscal multipliers, fiscal policy, government spending, economy, monetary policy, automatic stabilizers, fiscal instruments, economic downturns, economic expansions, fiscal adjustment

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.