The fiscal multiplier: positive or negative?
AbstractThis study examines whether the fiscal multiplier can be negative for certain types of government spending. The key result is that the fiscal multiplier can be negative if there is a high degree of substitutability between private and government consumption and government consumption is complementary to leisure.
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Bibliographic InfoPaper provided by Aboa Centre for Economics in its series Discussion Papers with number 54.
Date of creation: Sep 2009
Date of revision:
fiscal policy; fiscal multiplier; effectiveness of fiscal policy;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-CBA-2009-09-19 (Central Banking)
- NEP-MAC-2009-09-19 (Macroeconomics)
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