Fiscal Multipliers in Recessions

Matthew Canzoneri, Fabrice Collard, Harris Dellas () and Behzad Diba

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: The Great Recession, and the fiscal response to it, has revived interest in the size of fiscal multipliers. Standard business cycle models have difficulties generating multipliers greater than one. And they also fail to produce any significant asymmetry in the size of the multipliers over the business cycle. In this paper we employ a variant of the Curdia-Woodford model of costly financial intermediation to show that fiscal multipliers are strongly countercyclical. In particular, they can take values exceeding two during recessions, declining to values below one during expansions.

Keywords: Government Spending Multipliers; Cyclicality; Financial Frictions (search for similar items in EconPapers)
JEL-codes: E32 E62 H3 (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-dge, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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https://repec.vwiit.ch/dp/dp1204.pdf (application/pdf)

Related works:
Journal Article: Fiscal Multipliers in Recessions (2016)
Working Paper: Fiscal Multipliers in Recessions (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp1204

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