The electoral fiscal multiplier

Fabrizio Carmignani

Economic Analysis and Policy, 2022, vol. 76, issue C, 938-945

Abstract: The paper argues that in electoral times, a competent and opportunistic government switches from wasteful spending (e.g. pork-barrel) to non-wasteful spending. The result is that a fiscal shock crowds-in private consumption and the multiplier is greater than unity, but only around elections. In non-electoral times, private consumption is crowded out and non-Keynesian results apply. The empirical analysis allows for state-dependence of the multiplier and confirms that in electoral quarters, the multiplier is larger than one. Conversely, in non-electoral quarters, the multiplier is not different from zero.

Keywords: Fiscal policy multiplier; Government consumption; Elections (search for similar items in EconPapers)
JEL-codes: E62 E63 P16 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:76:y:2022:i:c:p:938-945

DOI: 10.1016/j.eap.2022.10.002

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