Welcome to the UPF Digital Repository

Understanding the size of the government spending multiplier: It's in the sign

Show simple item record

dc.contributor.author Barnichon, Régis
dc.contributor.author Matthes, Christian
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.accessioned 2018-02-14T15:29:58Z
dc.date.available 2018-02-14T15:29:58Z
dc.date.issued 2016-05-01
dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1555
dc.identifier.citation
dc.identifier.uri http://hdl.handle.net/10230/33881
dc.description.abstract Despite intense scrutiny, estimates of the government spending multiplier remain highly uncertain, with values ranging from 0.5 to 2. While an increase in government spending is generally assumed to have the same (mirror-image) effect as a decrease in government spending, we show that relaxing this assumption is important to understand the effects of fiscal policy. Regardless of whether we identify government spending shocks from (i) a narrative approach, or (ii) a timing restriction, we find that the contractionary multiplier -the multiplier associated with a negative shock to government spending- is above 1, while the expansionary multiplier -the multiplier associated with a positive shock- is substantially below 1. The multiplier is largest in recessions, as found in previous studies, but only because the contractionary multiplier is largest in recessions. The expansionary multiplier is always below 1 and not larger in recessions. We argue that our results help understand the wide range of multiplier estimates found in the literature.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 1555
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Understanding the size of the government spending multiplier: It's in the sign
dc.title.alternative
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2017-07-23T02:18:04Z
dc.subject.keyword
dc.subject.keyword Macroeconomics and International Economics
dc.rights.accessRights info:eu-repo/semantics/openAccess

Thumbnail

This item appears in the following Collection(s)

Show simple item record

Search DSpace


Advanced Search

Browse

My Account

Statistics

In collaboration with Compliant to Partaking