Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5084281 | International Review of Economics & Finance | 2006 | 24 Pages |
Abstract
Using annual data for the United States, the paper investigates the evidence of variation in the fiscal multiplier with the method of financing government spending. The fiscal multiplier varies in the face of positive and negative shocks and across methods of financing. In general, fiscal expansion appears insignificant on aggregate demand and economic activity. In contrast, the evidence presents a number of significant negative multipliers in the face of fiscal contraction. The combined evidence challenges the effectiveness of fiscal policy and supports arguments to restrain fiscal expansion in an effort to stimulate the economy.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Magda Kandil,