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The electoral fiscal multiplier

Author

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  • Carmignani, Fabrizio

Abstract

The paper argues that in electoral times, a competent and opportunistic government switches from wasteful spending (e.g. pork-barrel) to non-wasteful spending. The result is that a fiscal shock crowds-in private consumption and the multiplier is greater than unity, but only around elections. In non-electoral times, private consumption is crowded out and non-Keynesian results apply. The empirical analysis allows for state-dependence of the multiplier and confirms that in electoral quarters, the multiplier is larger than one. Conversely, in non-electoral quarters, the multiplier is not different from zero.

Suggested Citation

  • Carmignani, Fabrizio, 2022. "The electoral fiscal multiplier," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 938-945.
    • Handle: RePEc:eee:ecanpo:v:76:y:2022:i:c:p:938-945
    DOI: 10.1016/j.eap.2022.10.002
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    More about this item

    Keywords

    Fiscal policy multiplier; Government consumption; Elections;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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