Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284290 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 939
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
We estimate the fiscal (spending) multiplier using quarterly U.S. data, 1986-2017. We define government spending shocks as actual minus expected expenditure growth, the latter obtained from the Survey of Professional Forecasters. We employ the ST-VAR model with the local projections method. A key testable conjecture is that the effects of positive and negative spending shocks have numerically different effects (the latter being stronger). Although we cannot formally reject the null of equality, the conjecture does hold in general. We also find evidence of state-dependence of multipliers as previously pointed out.
Subjects: 
Fiscal multiplier
government spending
stabilisation policy
local projections
JEL: 
E60
E62
H30
Document Type: 
Working Paper

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