IMF Working Paper: Growth Forecast Errors and Fiscal Multipliers

Summary: 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.
Author/Editor: Blanchard, Olivier ; Leigh, Daniel
 
Authorized for Distribution: January 03, 2013
Electronic Access: Free Full text (PDF file size is 1,111KB). 
Use the free Adobe Acrobat Reader to view this PDF file 

Link to data for this title. (ZIP file size is 3,974KB).

 

Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debatehttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40200.0

http://www.imf.org/external/pubs/cat/longres.aspx?sk=40200.0

Mathias Destal

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s