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What fiscal policy is most effective? A Meta Regression Analysis

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  • Sebastian Gechert

Abstract

We apply meta regression analysis to a unique data set of 104 studies on multiplier effects with 1069 reported multipliers in order to derive stylized facts and to quantify the differing effectiveness of the composition of fiscal impulses, adjusted for the interference of study-design characteristics and sample specifics. As a major result, we find that public spending multipliers are close to one and about 0.3 to 0.4 units larger than tax and transfer multipliers. Public investment multipliers are even larger by approximately 0.5 units. Reported multipliers vary with study-design, thus, policy consulting based on a certain multiplier study should lay open by how much specification affects the results. Our meta analysis provides guidance concerning influential factors, their sign and magnitude.

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Paper provided by IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute in its series IMK Working Paper with number 117-2013.

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Length: 52 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:imk:wpaper:117-2013

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Keywords: multiplier effects; fiscal policy; meta analysis;

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Cited by:
  1. Gustav A. Horn & Alexander Herzog-Stein & Ansgar Rannenberg & Katja Rietzler & Silke Tober & Peter Hohlfeld & Fabian Lindner & Sabine Stephan, 2013. "Krise überwunden? Prognose der wirtschaftlichen Entwicklung 2013/2014," IMK Report, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute 86-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  2. Gustav A. Horn & Sebastian Gechert & Katja Rietzler & Kai D. Schmid, 2014. "Streitfall Fiskalpolitik," IMK Report, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute 92-2014, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  3. Sebastian Gechert & Rafael Mentges, 2013. "What Drives Fiscal Multipliers? The Role of Private Wealth and Debt," IMK Working Paper, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute 124-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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