Alessandro Cugnasca, Philipp Rother, 05 December 2015

The size of fiscal multipliers has been the subject of major public policy debates in the past few years. This column provides evidence that, on average, the size of the fiscal multiplier is in line with assumptions made by policymakers at the start of the crisis. The effects of fiscal consolidation, however, vary significantly depending on the state of the economy and the composition of the fiscal adjustment.

Jan Mohlmann, Wim Suyker, 01 December 2015

Olivier Blanchard and Daniel Leigh’s work on growth forecast errors and fiscal multipliers in 2009-2011 has been highly influential. This column extends their approach to recent years. The authors do not find convincing evidence for stronger-than-expected fiscal multipliers for EU countries during the sovereign debt crisis (2012-2013) or during the tepid recovery thereafter. 

Sebastian Gechert, Andrew Hughes Hallett, Ansgar Rannenberg, 26 February 2015

The literature on fiscal multipliers has expanded greatly since the outbreak of the Global Crisis. This column reports on a meta-regression analysis of fiscal multipliers collected from a broad set of empirical reduced form models. Multiplier estimates are significantly higher during economic downturns. Spending multipliers exceed tax multipliers, especially during recessions. The authors estimate that the Eurozone’s fiscal consolidation – most significantly transfer cuts – reduced GDP by 4.3% relative to the no-consolidation baseline in 2011, increasing to 7.7% in 2013.

Sebastian Gechert, Andrew Hughes Hallett, Ansgar Rannenberg, 25 February 2015

The literature on fiscal multipliers has expanded greatly since the outbreak of the Global Crisis. CEPR Policy Insight 79 reports on a meta-regression analysis of fiscal multipliers collected from a broad set of empirical reduced form models. Multiplier estimates are significantly higher during economic downturns. Spending multipliers exceed tax multipliers, especially during recessions. The authors estimate that the Eurozone’s fiscal consolidation – most significantly transfer cuts – reduced GDP by 4.3% relative to the no-consolidation baseline in 2011, increasing to 7.7% in 2013.

Enrique Mendoza, Carlos Vegh, Ethan Ilzetzki, 01 October 2009

Economists do not agree on one question crucial to evaluating governments' responses to the crisis: how much stimulus does spending provide? CEPR Policy Insight No.39 examines how the characteristics of an economy impact on the size of fiscal multipliers.

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