This paper analyses the reaction of fiscal policy to the cycle in OECD countries. The results suggest that while overall government balances were counter-cyclical in the past and more so in economic downturns than in upswings, discretionary fiscal policy was neutral on average. However,...

In response to the recent financial crisis, many governments adopted fiscal stabilization policies, whose multiplier effects generated considerable interest in academia and among policy makers. After a brief review of the foundations of fiscal multipliers, the paper presents the methods used to...