Fiscal Policy and Economic Activity During Recessions in Advanced Economies

Hemming, Richard; Mahfouz, Selma; Schimmelpfennig, Axel

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Fiscal Policy and Economic Activity During Recessions in Advanced Economies

IMF Working Paper No. 02/87

24 Pages Posted: 31 Jan 2006

See all articles by Richard Hemming

Axel Schimmelpfennig

International Monetary Fund (IMF)

There are 2 versions of this paper

Date Written: May 2002

Abstract

Using data for advanced economies, this paper investigates whether factors identified in the theoretical and empirical literature explain the effectiveness of fiscal policy in responding to recessions. The results are informative about the fiscal response to recessions but provide only a partial explanation of the impact of fiscal policy on economic activity. Overall, it would appear that fiscal multipliers are very small.

Keywords: Recessions, fiscal response, economic activity, fiscal multipliers

JEL Classification: C21, E62, E65, H30

Suggested Citation: Suggested Citation

Hemming, Richard and Mahfouz, Selma and Schimmelpfennig, Axel, Fiscal Policy and Economic Activity During Recessions in Advanced Economies (May 2002). IMF Working Paper No. 02/87, Available at SSRN: https://ssrn.com/abstract=879624