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economic activity, the government spending multiplier is positive and significant: an additional 1 USD of spending leads to an … positive expenditure multiplier imply that fiscal policy in South Asia amplifies boom-and-bust cycles …
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tended to grow faster contemporaneously, with a multiplier of around 1.5 for permanent transfers and 1/3 for temporary …
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The fiscal position can affect fiscal multipliers through two channels. Through the Ricardian channel, households reduce consumption in anticipation of future fiscal adjustments when fiscal stimulus is implemented from a weak fiscal position. Through the interest rate channel, fiscal stimulus...
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