On the Algebraic Calculation of the Fiscal Multiplier

Ahmed Mehedi Nizam

MPRA Paper from University Library of Munich, Germany

Abstract: Algebraic calculation of the fiscal multiplier ignores the concept of velocity of money. Here, we incorporate the concept of velocity of money in the algebraic derivation of the fiscal multiplier which results into a slightly different representation. Then, we empirically calculate the values of fiscal multipliers for 05 (five) OECD countries using our proposed algebraic representation and compare the results with the classical Keynesian values. Our results also point out why the theoretical values of the fiscal multipliers are higher than the empirical values.

Keywords: Fiscal Multiplier; Government Spending Multiplier; Government Spending; Fiscal Stimulus; Economic Multiplier; Fiscal Policy (search for similar items in EconPapers)
JEL-codes: E2 E6 H5 H6 (search for similar items in EconPapers)
Date: 2019-01-02
New Economics Papers: this item is included in nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:91173

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