Growth Forecast Errors and Government Investment and Consumption Multipliers
We compare the government investment and government consumption multipliers in the advanced economies during the recent ?scal consolidation, folloeing the Blanchard and Leigh (2013) approach. We find that, in the highly-indebted countries, the investment multplier is likely to be much higher than what has been assumed by the policy makers and much higher that the consumption multiplier. This points out that the consolidation should be accompanied by increased public investment.
|Date of creation:||17 Dec 2013|
|Date of revision:||17 Dec 2013|
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