Fiscal Policy and Economic Activity During Recessions in Advanced Economies

Axel Schimmelpfennig, Selma Mahfouz and Richard Hemming

No 2002/087, IMF Working Papers from International Monetary Fund

Abstract: Using data for advanced economies, this paper investigates whether factors identified in the theoretical and empirical literature explain the effectiveness of fiscal policy in responding to recessions. The results are informative about the fiscal response to recessions but provide only a partial explanation of the impact of fiscal policy on economic activity. Overall, it would appear that fiscal multipliers are very small.

Keywords: WP; recession; recession episode; depth of recession; contraction; Recessions; fiscal response; economic activity; fiscal multipliers; fiscal policy implementation; recession equation; recession observation; fiscal policy response; Fiscal stimulus; Fiscal stance; Automatic stabilizers; Europe; Global (search for similar items in EconPapers)
Pages: 24
Date: 2002-05-01
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Citations: View citations in EconPapers (27)

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