Growth Forecast Errors and Government Investment and Consumption Multipliers
Branimir Jovanovic ()
No 301, CEIS Research Paper from Tor Vergata University, CEIS
We compare the government investment and government consumption multipliers in the advanced economies during the recent ?scal consolidation, folloeing the Blanchard and Leigh (2013) approach. We find that, in the highly-indebted countries, the investment multplier is likely to be much higher than what has been assumed by the policy makers and much higher that the consumption multiplier. This points out that the consolidation should be accompanied by increased public investment.
Keywords: fiscal consolidation; fiscal multiplier; public consumption; public investment; public debt (search for similar items in EconPapers)
JEL-codes: E52 E62 E63 G01 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pbe
Date: 2013-12-17, Revised 2013-12-17
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