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Emperical data on fiscal multiplier

darkkermit
Posts: 11,204
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9/27/2012 6:43:17 PM
Posted: 4 years ago
So here's something interesting. I was curious what the empirical evidence is for the fiscal multiplier. With anybody interested, the fiscal multiplier is the increase in gdp from deficit spending.

Turns out that there are a few things that will cause the fiscal multiplier to be weakened. US meets many of the qualifiers, including a debt-gdp ratio greater than 60% and a flexible exchange rate.

http://personal.lse.ac.uk...
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lewis20
Posts: 5,093
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9/27/2012 7:01:18 PM
Posted: 4 years ago
At 9/27/2012 6:43:17 PM, darkkermit wrote:
So here's something interesting. I was curious what the empirical evidence is for the fiscal multiplier. With anybody interested, the fiscal multiplier is the increase in gdp from deficit spending.

Turns out that there are a few things that will cause the fiscal multiplier to be weakened. US meets many of the qualifiers, including a debt-gdp ratio greater than 60% and a flexible exchange rate.

http://personal.lse.ac.uk...

Does the fiscal multiplier necessarily come from deficit spending? or even government spending for that matter.
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darkkermit
Posts: 11,204
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9/27/2012 7:04:39 PM
Posted: 4 years ago
At 9/27/2012 7:01:18 PM, lewis20 wrote:
At 9/27/2012 6:43:17 PM, darkkermit wrote:
So here's something interesting. I was curious what the empirical evidence is for the fiscal multiplier. With anybody interested, the fiscal multiplier is the increase in gdp from deficit spending.

Turns out that there are a few things that will cause the fiscal multiplier to be weakened. US meets many of the qualifiers, including a debt-gdp ratio greater than 60% and a flexible exchange rate.

http://personal.lse.ac.uk...

Does the fiscal multiplier necessarily come from deficit spending? or even government spending for that matter.

It comes from deficit spending, although it doesn't have to come from government spending. It can come from tax cuts as well.
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