La Follette School of Public Affairs Working Paper No. 2015-002
17 Pages Posted: 31 Jan 2013
Date Written: January 29, 2013
The concept of fiscal multipliers is examined, in the context of the major theoretical approaches. Differing methods of calculating multipliers are then recounted (structural equations, VAR, simulation). The sensitivity of estimates to conditioning on the state of the economy (slack, financial system) and policy regimes (exchange rate system, monetary policy reaction function) is discussed.
Keywords: fiscal, spending, taxes, deficits, debt, crowding out, Ricardian equivalence, crowding out, portfolio balance, monetary reaction function
JEL Classification: E62, E43, F33, F41
Suggested Citation: Suggested Citation