Title: Fiscal Multipliers in Emerging European Economies
Abstract: Filling the evidence gap on the size and variations of fiscal multipliers in developing countries, and contributing to the debate on the fiscal transmission mechanism, we found that the government spending multipliers in emerging Europe are (i) higher than in developing countries and at lower end of those in developed countries; (ii) the fiscal multiplier is large under fixed exchange rate and close to zero under floating and this is related to different monetary policy stance across regimes; (iii) the multiplier substantially increases in the Great Recession relative to pre-crisis expansion; (iv) upon government spending shock private consumption increases under both exchange rate regimes, in downturn and expansion, and hence in the over-all sample, thus mimicking the corresponding pattern of spending multipliers, and hence supporting predictions of traditional and new Keynesian models rather than those of neoclassical ones.
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 5
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