1. Aggregate Effects of Budget Stimulus: Evidence from the Large Fiscal Expansions Database
- Author:
- Jérémie Cohen-Setton, Egor Gornostay, and Colombe Ladreit de Lacharrière
- Publication Date:
- 07-2019
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper estimates the effects of fiscal stimulus on economic activity using a novel database on large fiscal expansions for 17 OECD countries for the period 1960–2006. The database is constructed by combining the statistical approach to identifying large shifts in fiscal policy with narrative evidence from contemporaneous policy documents. When correctly identified, large fiscal stimulus packages are found to have strong and persistent expansionary effects on economic activity, with a multiplier of 1 or above. The effects of stimulus are largest in slumps and smallest in booms.
- Topic:
- Budget, Economy, Fiscal Policy, and Stimulus
- Political Geography:
- Global Focus