Fiscal Multipliers for India

Sukanya Bose () and N R Bhanumurthy

Margin: The Journal of Applied Economic Research, 2015, vol. 9, issue 4, 379-401

Abstract: This article attempts to present a framework for the estimation of fiscal multipliers for the Indian economy in the structural macroeconomic modelling tradition. Empirical estimates of short-run multipliers are obtained by giving shocks to a range of fiscal instruments—expenditures and taxes. As per our estimates, the values of the capital expenditure multiplier, transfer payments multiplier and other revenue expenditure multiplier are 2.45, 0.98 and 0.99, respectively, while the tax multipliers are around −1. Expenditure multipliers were also obtained in the presence of fiscal consolidation targets. These estimates again point to the strong multiplier effect of capital expenditure on output, and underscore the need to prioritise capital expenditure. JEL Classification: H50, C54

Keywords: Fiscal Multiplier; Structural Modelling; India (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (17)

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Working Paper: Fiscal Multipliers for India (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:9:y:2015:i:4:p:379-401

DOI: 10.1177/0973801015598585

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