IMF Working Papers

Heterogeneous Spending, Heterogeneous Multipliers

By Umberto Muratori, Pedro Juarros, Daniel Valderrama

March 10, 2023

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Umberto Muratori, Pedro Juarros, and Daniel Valderrama. Heterogeneous Spending, Heterogeneous Multipliers, (USA: International Monetary Fund, 2023) accessed December 23, 2024

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Summary

Do local fiscal multipliers depend on what the government purchases? We find that government purchases of services have larger effects on employment than spending on goods. Industries producing services are more labor-intensive than industries producing goods. This heterogeneity in labor intensity is an important mechanism behind these results. Spending directed toward labor-intensive industries generates stronger increases in employment and labor income relative to spending toward non-labor-intensive industries.

Keywords: Heterogeneous Local Fiscal Multipliers, Labor Intensity, Services and Goods Spending

Publication Details

  • Pages:

    50

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/052

  • Stock No:

    WPIEA2023052

  • ISBN:

    9798400233777

  • ISSN:

    1018-5941