The Government Spending Multiplier at the Zero Lower Bound: International Evidence from Historical Data

Based on a large historical panel dataset, this paper provides robust evidence that the government spending multiplier is significantly higher when interest rates are at, or near, the zero lower bound. We estimate fiscal multipliers that are around 1.5 during zero lower bound episodes and significantly below unity outside of it. We show that the difference in multipliers is not driven by multipliers being higher during periods of economic slack.

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Year of publication:	2018
Authors:	Klein, Mathias ; Winkler, Roland
Publisher:	Kiel, Hamburg : ZBW - Leibniz-Informationszentrum Wirtschaft
Subject:	Government spending multiplier \| zero lower bound \| local projections

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Macroeconomics - Fiscal Policy ; B04-V1
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	hdl:10419/181524 [Handle] RePEc:zbw:vfsc18:181524 [RePEc]
Classification:	E32 - Business Fluctuations; Cycles ; E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; E65 - Studies of Particular Policy Episodes
Source:	EconStor

Persistent link: https://www.econbiz.de/10011892029