Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237953 
Year of Publication: 
2020
Series/Report no.: 
ESRI Working Paper No. 682
Publisher: 
The Economic and Social Research Institute (ESRI), Dublin
Abstract: 
Blanchard and Leigh (2013, 2014) find fiscal multipliers to be underestimated in the EU in the deep recession of the early 2010s. Using two 2013-2018 datasets for 26 EU member states, assembled from Stability and Convergence Programmes and the European Commission's Spring Forecasts, we show that multiplier estimates in the EU have been overestimated in the post-crisis period. Forecasters then are still not capturing accurately the impact that fiscal policy has on output growth rates and are misestimating in a manner opposite to that reported by Blanchard and Leigh. This result is pertinent at a time when fiscal stimulus is occurring in many member states in response to the adverse economic effects of Covid-19.
Subjects: 
Fiscal policy
Multipliers
Forecast errors
JEL: 
C23
E62
H68
Document Type: 
Working Paper

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