Government spending multipliers in contraction and expansion

Qazizada, Walid and Stockhammer, Engelbert (2014) Government spending multipliers in contraction and expansion. (Discussion Paper) Kingston upon Thames, U.K. : Faculty of Arts and Social Sciences, Kingston University. 29 p. (Economics Discussion Paper, no. 2014-02)

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This paper investigates the impact of government spending on output and the size of the spending multiplier during periods of output contraction vs. expansion. It also investigates the impact of spending when the economy hits the nominal zero lower bound. It uses a panel of 21 advanced countries over the period of 1979-2011, applying a TSLS estimation technique. We find a spending multiplier of close to 1 during expansion and values of up to 3 during contractions. However, our results do not indicate a difference in the impact of spending during nominal zero lower bound periods.

Item Type: Monograph (Discussion Paper)
Uncontrolled Keywords: Fiscal multiplier; fiscal policy; panel analysis; output contraction
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences (until 2017) > School of Economics, History and Politics (from November 2012)
Depositing User: Susan Miles
Date Deposited: 12 May 2014 07:53
Last Modified: 12 May 2014 07:53
DOI: 2014-2

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