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Estimating the fiscal multiplier in Argentina

Author

Listed:
  • Anos-Casero, Paloma
  • Cerdeiro, Diego
  • Trezzi, Riccardo

Abstract

Argentina's government has resorted to fiscal policy as a countercyclical tool to mitigate the negative impact of the current economic downturn on aggregate demand. Empirical results based on a vector error correction model suggest, however, that the fiscal multiplier is relatively small and short-lived. This could reflect a number of factors, including the higher propensity of households to save during the economic downturn, the implementation lag of public expenditures, particularly of capital expenditures, and the narrow tax base that limits the impact of countercyclical revenue measures on domestic demand.

Suggested Citation

  • Anos-Casero, Paloma & Cerdeiro, Diego & Trezzi, Riccardo, 2010. "Estimating the fiscal multiplier in Argentina," Policy Research Working Paper Series 5220, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5220
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    Citations

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    Cited by:

    1. Alejandro Izquierdo & Ruy E. Lama & Juan Pablo Medina & Jorge P. Puig & Daniel Riera-Crichton & Carlos A. Vegh & Guillermo Vuletin, 2019. "Is the Public Investment Multiplier Higher in Developing Countries? An Empirical Investigation," NBER Working Papers 26478, National Bureau of Economic Research, Inc.
    2. Jorge Puig, 2014. "Multiplicador del gasto público en Argentina," Económica, Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 60, pages 188-210, January-D.
    3. Nicoletta Batini & Mr. Luc Eyraud & Miss Anke Weber, 2014. "A Simple Method to Compute Fiscal Multipliers," IMF Working Papers 2014/093, International Monetary Fund.
    4. Vlasov, S. & Ponomarenko, A., 2010. "The Role of Budget Policy under the Financial and Economic Crisis," Journal of the New Economic Association, New Economic Association, issue 7, pages 111-133.
    5. Mr. Yan Carriere-Swallow & Mr. Antonio David & Mr. Daniel Leigh, 2018. "The Macroeconomic Effects of Fiscal Consolidation in Emerging Economies: Evidence from Latin America," IMF Working Papers 2018/142, International Monetary Fund.

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