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WHICH FISCAL MULTIPLIERS ARE REGIME‐DEPENDENT? A META‐REGRESSION ANALYSIS
Author(s) -
Gechert Sebastian,
Rannenberg Ansgar
Publication year - 2018
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12241
Subject(s) - fiscal multiplier , multiplier (economics) , economics , government spending , recession , meta regression , econometrics , fiscal policy , regression analysis , macroeconomics , meta analysis , welfare , mathematics , statistics , medicine , market economy
We analyse whether estimated multiplier effects are systematically higher if the economy suffers a downturn. For that purpose, we conduct a meta‐regression analysis on a unique data set of 98 empirical studies with more than 1800 observations on multiplier effects and control for regime‐dependence of the multiplier. We find that spending multipliers are much higher (by about 0.7–0.9 units) during a downturn. Tax multipliers are not sensitive to the economic regime, and generally lower than spending multipliers. Finally, for all spending categories other than government consumption, the multiplier significantly exceeds one during downturns.