Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153651
Authors: 
Afonso, António
Grüner, Hans Peter
Kolerus, Christina
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper 1217
Abstract: 
In this paper we assess to what extent in the existence of a financial crisis, government spending can contribute to mitigate economic downturns in the short run and whether such impact differs in crisis and non crisis times. We use panel analysis for a set of OECD and non-OECD countries for the period 1981-2007. The fiscal multiplier for the full sample for instrumented regular and crisis spending is about 0.6-0.8 considering the sample average government spending share of GDP of about one third. Altogether, we cannot reject the hypothesis that crisis spending and regular spending have the same impact using a variation of controls, sub-samples and specifications.
Subjects: 
EU
financial crisis
Fiscal Policy
Growth
oecd
panel analysis
JEL: 
C23
E62
E44
F43
H50
Document Type: 
Working Paper

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