Year: 2015
Type: article
Abstract: This article attempts to present a framework for the estimation of fiscal multipliers for the Indian economy in the structural macroeconomic modelling tradition. Empirical estimates of short-run multipliers are obtained by giving shocks to a range of fiscal instruments—expenditures and taxes. As per our estimates, the values of the capital expenditure multiplier, transfer payments multiplier and other revenue expenditure multiplier are 2.45, 0.98 and 0.99, respectively, while the tax multipliers are around −1. Expenditure multipliers were also obtained in the presence of fiscal consolidation targets. These estimates again point to the strong multiplier effect of capital expenditure on output, and underscore the need to prioritise capital expenditure. JEL Classification: H50, C54
Authors: Sukanya Bose, N.R. Bhanumurthy
Institution: National Institute of Public Finance and Policy
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2113643017