IDEAS home Printed from
   My bibliography  Save this paper

The Government Expenditure Multiplier and its Estimates for Poland in 2006-2009


  • Kazimierz Laski

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Jerzy Osiatynski
  • Jolanta Zieba


The paper starts with examining the standard concept of government expenditure multiplier and finds that in a model of open economy with government revenues and expenditures the multiplier definition is incorrect in so far as the import intensity component relates total imports to GDP, whereas part of imports serves as inputs in exported output. Therefore the value of imports should be related to the value of final output, which is the sum of domestic absorption and exports. Since for most countries final output is significantly larger than GDP, the value of the multiplier is correspondingly larger. Moreover, the paper argues that, the import intensity of exports being as a rule larger than that of domestic absorption, the import intensity of the latter - which is the import intensity relevant for the government expenditure multiplier - is lower than that of final output, which again raises the value of the multiplier. Next the value of the government expenditure multiplier in Poland in 2006-2008 is estimated on the basis of statistics of non-financial quarterly accounts by institutional sectors. The variations in the value of multiplier are found to depend heavily on changes in import intensity of domestic absorption. The value of the multiplier ranges between 1.59 and 1.70 if, in order to reduce the impact of seasonal fluctuations, it is calculated on a quarterly basis, for four consecutive quarters, and between 1.62 and 1.86 if, in order to make the calculations more suitable for economic forecasting, the quarterly coefficients year on year are used. Both sets of multiplier values are slightly higher than those assumed in other countries (1.5-1.6) which may be explained by the rather high import intensity of Polish exports.

Suggested Citation

  • Kazimierz Laski & Jerzy Osiatynski & Jolanta Zieba, 2010. "The Government Expenditure Multiplier and its Estimates for Poland in 2006-2009," wiiw Working Papers 63, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:63

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Thomas I. Palley, 2009. "Imports and the income-expenditure model: implications for fiscal policy and recession fighting," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 32(2), pages 311-322, December.
    2. repec:spr:sptbec:978-3-662-49862-0 is not listed on IDEAS
    3. Vladimir Gligorov & Mario Holzner & Leon Podkaminer, 2011. "Monthly Report No. 8-9/2011," wiiw Monthly Reports 2011-08-09, The Vienna Institute for International Economic Studies, wiiw.
    4. Giancarlo Gandolfo, 2016. "International Finance and Open-Economy Macroeconomics," Springer Texts in Business and Economics, Springer, edition 2, number 978-3-662-49862-0, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Gabrisch, Hubert, 2011. "On the Twin Deficits Hypothesis and the Import Propensity in Transition Countries," IWH Discussion Papers 20/2011, Halle Institute for Economic Research (IWH).
    2. Pusch, Toralf & Rannenberg, Ansgar, 2011. "Fiscal Spending Multiplier Calculations based on Input-Output Tables – with an Application to EU Members," IWH Discussion Papers 1/2011, Halle Institute for Economic Research (IWH).
    3. Hubert Gabrisch, 2015. "On the twin deficits hypothesis and the import intensity in transition countries," International Economics and Economic Policy, Springer, vol. 12(2), pages 205-220, June.

    More about this item


    macroeconomics; principle of effective demand; fiscal multiplier; stabilization policy;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • 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


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:63. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.