Does it matter where and how governments spend?

Ernil Sabaj (), Rashid Sbia and Haytem Troug

Economics Letters, 2023, vol. 228, issue C

Abstract: This paper studies government spending multipliers in a panel of OECD countries. While recent literature has highlighted the differences in government consumption and investment effects, we extend this approach sectorally and report findings that suggest strong heterogeneities across sectors for government spending and output. Differences in price stickiness and sectors’ position in the production network are the main drivers of these heterogeneities.

Keywords: Fiscal multiplier; Government investment; Government consumption; Sectoral heterogeneity; Sector-specific shocks (search for similar items in EconPapers)
JEL-codes: E60 E62 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001830

DOI: 10.1016/j.econlet.2023.111158

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