 Structural characteristics and non-linear fiscal multipliersMahima Gupta and Amlendu Dubey Economic Systems, 2025, vol. 49, issue 1 Abstract: We identify structural characteristics of economies which determine the fiscal multipliers in normal times. We find that structural variables determine fiscal multipliers in a non-linear fashion where fiscal multipliers change significantly across the threshold of structural variables. Using the recently developed Panel Latent Threshold Model, we identify latent groups of countries intrinsic to the structural characteristics of the variables. Results suggest that improvement in human development and financial infrastructure measures play a prominent role in enhancing the fiscal multiplier effects across the economies. We also find that economies can achieve higher fiscal multipliers by keeping a check on the import propensity. We identify female labour force participation as one of the significant structural determinants of the fiscal multiplier, where many latent groups find parallels with the declining portion of the feminisation U-shaped hypothesis. Overall, the results suggest that countries should pursue targeted structural change-oriented fiscal policy to achieve higher economic growth. Keywords: Fiscal Multiplier; Structural Characteristics; Non-linear; Advanced Economies; Emerging Markets & Developing Economies; Latent Groups (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:49:y:2025:i:1:s0939362524000694 DOI: 10.1016/j.ecosys.2024.101247 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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