Fiscal Multipliers During the Global Financial Crisis: Fiscal and Monetary Interaction Matters
Year: 2014
Type: article
Abstract: This study investigates the fiscal multipliers of 21 OECD countries during the global financial crisis using panel VAR methodology. Our findings suggest that the 1-year fiscal multiplier was greater than 1 during the crisis, whereas it was smaller than 1 before the crisis because of different fiscal and monetary interactions. The combination of expansionary monetary and fiscal policies during the crisis boosted GDP more effectively through internal and external transmissions: investment crowding-out was limited, and net exports were spurred by the policy interaction. In addition, our results are robust to various specifications.
Source: Contemporary Economic Policy
DOI: 10.1111/coep.12067
Authors: Ju Hyun Pyun, Dong‐Eun Rhee
Institutions: Korea University, Myongji University
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3122559611