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Fiscal Multipliers in Russia

Author

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  • Vlasov, S.

    (Bank of Russia, Research and Forecasting Department, Moscow, Russia)

  • Deryugina, E.

    (Bank of Russia, Research and Forecasting Department, Moscow, Russia)

Abstract

The paper covers theoretical and practical issues related to estimation of fiscal multipliers for the Russian economy that measure the response of output to the discretionary change in fiscal indicators. Analysis of the main determinants affecting the size of multipliers suggests relatively low values of fiscal multipliers in Russia. By means of a Structural Bayesian Autoregressive Model we obtain the multiplier for the overall government revenue and spending equal to -0,75 and 0,28 correspondingly, i.e. an increase in government revenue (spending) by 1 per cent of GDP leads to a decrease (increase) in output by 0,75 (0,28) per cent. In the case of government spending shock the maximum effect on output is in the subsequent quarter after the shock, while in the case of revenue shock the effect builds up quarter by quarter and reaches its peak in the eighth quarter. The results obtained are generally in line with the expectations as well as with the results available for the emerging market economies. Fiscal consolidation scheduled for the medium-term is expected to have negative impact on the output growth. However, since it is intended to be carried out mainly at the expense of the expenditure part of the budget, this should be less harmful for economic growth and could promote the efficiency of public spending.

Suggested Citation

  • Vlasov, S. & Deryugina, E., 2018. "Fiscal Multipliers in Russia," Journal of the New Economic Association, New Economic Association, vol. 38(2), pages 104-119.
    • Handle: RePEc:nea:journl:y:2018:i:38:p:104-119
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    Cited by:

    1. Anton I. Votinov & Maria A. Elkina, 2018. "Estimation of Fiscal Stimulus Efficiency in Russian Economy: Simple DSGE Model With Government Sector," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 83-96, October.
    2. Ekaterina Pyltsyna, 2018. "The Change Of Fiscal Multiplier When Switching From Managed Exchange Rate Regime To Thefloating One," HSE Working papers WP BRP 206/EC/2018, National Research University Higher School of Economics.
    3. Samvel S. Lazaryan & Maria A. Elkina, 2021. "Financial Sector’s Role in Transmission of Monetary and Fiscal Shocks in Russian Economy: Estimation Under Different Assumptions About Production Sector," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 25-53, December.
    4. Sergey Vlasov, 2018. "Impact of the fiscal manoeuvre on GDP growth: estimation of short-term effects using fiscal multipliers," Bank of Russia Working Paper Series note17, Bank of Russia.
    5. Sayed O. M. Timuno & Joel Hinaunye Eita & Lanouar Charfeddine, 2020. "Towards an effective fiscal stimulus: Evidence from Botswana," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1790948-179, January.
    6. V. A. Malakhov & K. V. Nesytykh, 2022. "Russia’s Long-Term Macroeconomic Losses and Benefits from the Low-Carbon Development of the World and Domestic Energy Industry," Studies on Russian Economic Development, Springer, vol. 33(4), pages 392-401, August.
    7. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    8. Samvel S. Lazaryan & Maria A. Elkina, 2018. "Estimation of the Government Expenditures Multiplier in the Republic of Armenia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 21-31, August.

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    More about this item

    Keywords

    fiscal multipliers; general government revenue; general government spending; Russia; Structural BVAR;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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