A Simple Method to Compute Fiscal Multipliers

By Nicoletta Batini, Luc Eyraud, Anke Weber

June 9, 2014

Preview Citation

Format: Chicago

Nicoletta Batini, Luc Eyraud, and Anke Weber. A Simple Method to Compute Fiscal Multipliers, (USA: International Monetary Fund, 2014) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. For these countries, we propose a simple method—dubbed the “bucket approach”—to come up with reasonable multiplier estimates. The approach bunches countries into groups (or “buckets”) with similar multiplier values, based on their characteristics. It also takes into account the effect of some temporary factors, such as the state of the business cycle.

Subject: Automatic stabilizers, Exchange rate arrangements, Expenditure, Fiscal multipliers, Fiscal policy, Foreign exchange

Keywords: Automatic stabilizers, Exchange rate arrangements, Fiscal multiplier, Fiscal multipliers, Fiscal policy, Government spending, Multiplier, Multipliers in EME, Spending, Spending shock, Stance factor, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/093
Stock No:

WPIEA2014093
ISBN:

9781498357999
ISSN:

1018-5941

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