What determines government spending multipliers?

Giancarlo Corsetti, Andre Meier, and Gernot J. Müller

This paper studies how the effects of government spending vary with the economic environment. Using a panel of OECD countries, we identify fiscal shocks as residuals from an estimated spending rule and trace their macroeconomic impact under different conditions regarding the exchange rate regime, public indebtedness, and health of the financial system. The unconditional responses to a positive spending shock broadly confirm earlier findings. However, conditional responses differ systematically across exchange rate regimes, as real appreciation and external deficits occur mainly under currency

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Year of publication:	2012
Authors:	Corsetti, Giancarlo ; Meier, André ; Müller, Gernot J.
Publisher:	Washington, DC : Internat. Monetary Fund
Subject:	Finanzpolitik \| Fiscal policy \| Öffentliche Ausgaben \| Public expenditure \| Multiplikator \| Multiplier \| Wechselkurssystem \| Exchange rate regime \| Finanzkrise \| Financial crisis \| OECD-Staaten \| OECD countries \| 1975-2008

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Extent:	Online-Ressource (PDF-Datei: 45 S., 1,051 KB) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 12/150 IMF Working Papers
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Includes bibliographical references Systemvoraussetzungen: Acrobat Reader Cover; 1 Introduction; 2 Fiscal policy in different economic environments; 2.1 A theoretical benchmark; 2.2 Pegged exchange rates; 2.3 Weak public finances; 2.4 Financial crises; 3 Empirical strategy; 3.1 Identification issues; 3.2 The first step: Identifying government spending shocks; 3.3 The second step: Tracing the effects of government spending in different economic environments; 3.4 The data; 4 Systematic and non-systematic changes in government spending; 5 The effects of government spending shocks; 5.1 Unconditional effects; 5.2 Accounting for the economic environment 5.3 Sensitivity analysis6 Conclusion; References; Tables; Table 1. Composition of Initial and Final Samples; Table 2. Data Sources and Definitions; Table 3. Results of First-Step Regression; Table 4. Summary Statistics for Estimated Government Spending Shocks; Table 5. Overview of Dummy Characteristics; Figure 5: Results for narrow definition of financial crisis; Figure 6: Results for alternative definition of weak public finances (government debt > 120 percent of GDP and/or lagged net borrowing > 7 percent of GDP); Figure 7: Results for difference specification Figure 8: Results for first-step specification which includes contemporaneous value of crisis dummyFigure 9: Results without CLI in first step; Figure 10: Results for sample without 2007-2008; Figure 11: Results for sample without United States Electronic reproduction; Available via World Wide Web
ISBN:	978-1-4755-0421-7 ; 978-1-4755-5692-6 ; 978-1-4755-0421-7
Source:	ECONIS - Online Catalogue of the ZBW

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