Fiscal Multipliers in the ECCU

Jesus Gonzalez-Garcia, Antonio Lemus and Mico Mrkaic

No 2013/117, IMF Working Papers from International Monetary Fund

Abstract: The multipliers of taxes, and government consumption and investment expenditure for the Eastern Caribbean Currency Union (ECCU) are estimated using vector autoregression models with panel data. The impact and long-run multipliers are below unity, suggesting that a great extent of the intended impulse ends up expanding imported demand. The long-run multipliers of taxes and consumption expenditure are non-different from zero statistically, while public investment has a long-run multiplier of 0.6. The results suggest that countercyclical policies to stimulate growth should focus on public investment.

Keywords: WP; time series; Fiscal Multipliers; Panel VAR; OECS; ECCU; government investment expenditure multiplier; government consumption expenditure; public spending multiplier; fiscal multiplier; investment multiplier; Public investment spending; Global (search for similar items in EconPapers)
Pages: 17
Date: 2013-05-22
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Citations: View citations in EconPapers (18)

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