The Role of Institutional Quality on the Effects of Fiscal Stimulus

Leopoldo Avellan (), Arturo Galindo and John León-Díaz

No 10270, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper provides evidence on the effect of fiscal stimulus on economic activity for countries with different degrees of institutional quality. For a panel of 113 countries during the period 1988-2017, we find evidence that an increment of 1% in government consumption yields a sizable, persistent and stable increase in economic activity of 0.9% in countries with higher institutional quality.

Keywords: Fiscal policy; Economic activity; Institutional quality (search for similar items in EconPapers)
JEL-codes: E02 E32 E62 (search for similar items in EconPapers)
Date: 2020-04
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:10270

DOI: 10.18235/0002316

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