Output Spillovers from Fiscal Policy

Alan Auerbach and Yuriy Gorodnichenko

No 18578, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we estimate the cross-country spillover effects of government purchases on output for a large number of OECD countries. Following the methodology in Auerbach and Gorodnichenko (2012a, b), we allow these multipliers to vary smoothly according to the state of the economy and use real-time forecast data to purge policy innovations of their predictable components. We also consider the responses of other key macroeconomic variables. Our findings suggest that cross-country spillovers have an important impact, and also confirm those of our earlier papers that fiscal shocks have a larger impact when the affected country is in recession.

JEL-codes: E32 E62 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-mac and nep-pbe
Note: EFG PE
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Citations: View citations in EconPapers (29)

Published as Alan J. Auerbach & Yuriy Gorodnichenko, 2013. "Output Spillovers from Fiscal Policy," American Economic Review, American Economic Association, vol. 103(3), pages 141-46, May.

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