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The Role of Fiscal Rules for Spending Multipliers in European Union Countries

Author

Listed:
  • Anna Sznajderska
  • Andrzej Torój
  • Rafał Chmura

Abstract

This paper focuses on the role of fiscal rules in shaping the macroeconomic effects of fiscal policy. We compare the fiscal multipliers across the European Union members and search for the drivers of their heterogeneity. To this aim we apply interacted panel vector autoregressive models to data from 27 EU countries over the period 1999-2022. Our results show that government spending multipliers are higher for countries with a relatively higher fiscal rule index compared to those with a lower index.

Suggested Citation

  • Anna Sznajderska & Andrzej Torój & Rafał Chmura, 2025. "The Role of Fiscal Rules for Spending Multipliers in European Union Countries," KAE Working Papers 2025-108, Warsaw School of Economics, Collegium of Economic Analysis.
    • Handle: RePEc:sgh:kaewps:2025108
    DOI: 10.33119/kaewps2025108
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    File URL: https://hdl.handle.net/20.500.12182/1322
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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