Description

This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.

Taxonomy

Economic policy , Fiscal policy

More publications in this series: Working Papers

More publications by: Selma Mahfouz ; Richard Hemming ; Michael Kell