Fiscal Multipliers in Good Times and Bad Times

Faik Koray (), Kerim Arin and Nicola Spagnolo

Departmental Working Papers from Department of Economics, Louisiana State University

Abstract: This paper estimates the magnitudes of government spending and tax multipliers within a regime-switching framework for the U.S economy during the period 1949:1- 2006:4. Our results show that the magnitudes of spending multipliers are larger during periods of low economic activity, while the magnitudes of tax multipliers are larger during periods of high economic activity. We also show that the magnitudes of fiscal multipliers got smaller for episodes of low growth, while they got larger for episodes of high growth in the post 1980 period.

Date: 2013-08
New Economics Papers: this item is included in nep-pbe
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Journal Article: Fiscal multipliers in good times and bad times (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lsu:lsuwpp:2013-08

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