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On theories and estimation techniques of fiscal multipliers

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  • Sebastian Gechert

Abstract

The fiscal multiplier is a condensed key figure of the complex transmission mechanism of fiscal policy into output. I give an overview and systemize the numerous contributions to the theory and measurement of multipliers. The analysis is not confined to a certain model class but is intended to be as inclusive as possible to lay out the relevant channels of influence that have been discussed in the literature, while pointing to some blind spots. I also review the econometric problems when estimating fiscal multipliers and the estimation techniques at hand.

Suggested Citation

  • Sebastian Gechert, 2017. "On theories and estimation techniques of fiscal multipliers," FMM Working Paper 11-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:fmmpap:11-2017
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    File URL: http://www.boeckler.de/pdf/p_fmm_imk_wp_11_2017.pdf
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    References listed on IDEAS

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    1. António Afonso & Hans Peter Grüner & Christina Kolerus, 2010. "Fiscal Policy and Growth: Do Financial Crises make a Difference?," Working Papers Department of Economics 2010/10, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. Antonio Acconcia & Giancarlo Corsetti & Saverio Simonelli, 2014. "Mafia and Public Spending: Evidence on the Fiscal Multiplier from a Quasi-experiment," American Economic Review, American Economic Association, vol. 104(7), pages 2185-2209, July.
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    Cited by:

    1. Landwehr, Jannik J., 2020. "The case for a job guarantee policy in Germany: A political-economic analysis of the potential benefits and obstacles," IPE Working Papers 150/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Angela Köppl & Margit Schratzenstaller, 2022. "Macroeconomic Effects of Green Recovery Programmes. Conceptual Framing and a Review of the Empirical Literature," WIFO Working Papers 646, WIFO.
    3. Sebastian Gechert, 2023. "Fiscal policy: post- or New Keynesian?," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 20(2), pages 338-355, November.

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    More about this item

    Keywords

    Fiscal multiplier; literature review; history of economic thought;
    All these keywords.

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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