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Growth Forecast Errors and Fiscal Multipliers
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The authors investigated the relation between growth forecast errors and planned fiscal consolidation during the crisis and found that stronger planned consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis.Abstract:
This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis.read more
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References
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The External Wealth of Nations Mark Ii: Revised and Extended Estimates of Foreign Assets and Liabilities, 1970-2004
Philip R. Lane,Philip R. Lane,Philip R. Lane,Gian Maria Milesi-Ferretti,Gian Maria Milesi-Ferretti +4 more
TL;DR: In this article, the authors construct estimates of external assets and liabilities for 145 countries for the period 1970-2004, focusing on trends in net and gross external positions, and the composition of international portfolios.
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The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks
TL;DR: This paper investigated the impact of tax changes on economic activity and found that tax increases are highly contractionary and that the behavior of output following these more exogenous changes indicates that the effects of tax increases were strongly significant, highly robust, and much larger than those obtained using broader measures of tax change.
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When Is the Government Spending Multiplier Large
TL;DR: In this article, the size of the multiplier in a dynamic, stochastic, general equilibrium model was investigated and it was shown that the multiplier effect is substantially larger than one when the zero lower bound on the nominal interest rate binds.
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Household Balance Sheets, Consumption, and the Economic Slump*
Atif Mian,Kamalesh Rao,Amir Sufi +2 more
TL;DR: In this article, the authors use the highly unequal geographic distribution of wealth losses across the United States to estimate a large elasticity of consumption with respect to housing net worth of 0.6 to 0.8, which soundly rejects the hypothesis of full consumption risk sharing.
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Simple Analytics of the Government Expenditure Multiplier
TL;DR: In this article, the authors explain the key factors that determine the output multiplier of government purchases in New Keynesian models, through a series of simple examples that can be solved analytically.