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Fiscal Multipliers in Recessions

Bibliographic Data

ID9718204
AuthorsMatthew B Canzoneri (Georgetown University), Matthew Canzoneri (Georgetown University), Fabrice Collard (0009-0008-3534-0511, University of Bern), Harris Dellas (University of Bern), Behzad Diba (Georgetown University)
Year2016
Volume126
Issue590
Pages75-108
Publication date2016-02-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12304
OpenAlexW1944875422
LanguageEN
Citations received15
References cited31

Standard business cycle models have difficulties generating large, state‐dependent fiscal multipliers. Employing a model of costly financial intermediation based on Curdia–Woodford, we show that fiscal multipliers can be strongly state dependent: fiscal expansions during recessions may lead to multiplier values exceeding two, while similar expansions during economic booms would produce values falling short of unity. This pattern obtains if the spread (the financial friction) is more sensitive to fiscal policy during recessions than during expansions, a feature that is present in the data. Our results are consistent with recent empirical work documenting the state contingency of multipliers

Boom · Business cycle · Econometrics · Economics · Fiscal multiplier · Fiscal policy · Government spending · Keynesian economics · Macroeconomics · Multiplier (economics · Recession · Economic theories and models · Global Financial Crisis and Policies · Monetary Policy and Economic Impact

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Unique citing works15
Citations per year1,36
Citation span2015 - 2025 (11)
Citation velocityrecent
Highly citedNo
Citation typesNeutral: 15

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