The fiscal multiplier: positive or negative?

Juha Tervala ()

No 54, Discussion Papers from Aboa Centre for Economics

Abstract: This study examines whether the fiscal multiplier can be negative for certain types of government spending. The key result is that the fiscal multiplier can be negative if there is a high degree of substitutability between private and government consumption and government consumption is complementary to leisure.

Keywords: fiscal policy; fiscal multiplier; effectiveness of fiscal policy (search for similar items in EconPapers)
JEL-codes: E62 H31 H42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2009-09

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Persistent link: http://EconPapers.repec.org/RePEc:tkk:dpaper:dp54

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