On the Numerical Structure of Local and Nationwide Government Spending Multipliers: What Can We Learn from the Greek Crisis?
Eduardo Haddad,
Natalia Cotarelli and
Vinícius Vale
No 2-2018, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)
Abstract:
We develop a multiregional general equilibrium model for Greece to simulate the short run impacts of temporary deficit-financed rises in government spending. It has been recognized that the fiscal multiplier is a function of structural features of the economy and policy reaction parameters. Moreover, the debate on the magnitude of the multiplier along the business cycle has also been the subject of disputed debates. On these grounds, we look at the Greek case by calibrating the model using data for distinct states of the Greek economy during the development of the recent crisis. Whether this matters for local and nationwide multipliers depends on qualitative differences of the numerical structures of the model. Our results imply that structural coefficients have a strong effect on government spending impact multipliers. In the case of Greece, lack of information on the changing magnitudes of behavioral parameters over time adds another layer of uncertainty to this debate.
Keywords: computable general equilibrium (CGE); fiscal multiplier; government spending; Greek crisis (search for similar items in EconPapers)
JEL-codes: R10 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2018
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.usp.br/nereus/wp-content/uploads/TD_Nereus_02_2018.pdf Full text (application/pdf)
ris
Related works:
Journal Article: On the numerical structure of local and nationwide government spending multipliers: what can we learn from the Greek crisis? (2024)
Working Paper: On the Numerical Structure of Local and Nationwide Government Spending Multipliers: What Can We Learn from the Greek Crisis? (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ris:nereus:2018_002
Access Statistics for this paper
More papers in TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS) Contact information at EDIRC.
Bibliographic data for series maintained by Eduardo Amaral Haddad (ehaddad@usp.br).