The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Fiscal Multipliers

  • Menzie Chinn
Reference work entry


The concept of fiscal multipliers is examined in the context of the major theoretical approaches. Differing methods of calculating multipliers are then recounted (structural equations, VAR, simulation). The sensitivity of estimates to conditioning on the state of the economy (slack, financial system) and policy regimes (exchange rate system, monetary policy reaction function) is discussed.


Crowding out Debt Deficits Fiscal Monetary reaction function Portfolio balance Ricardian equivalence Spending Taxes 

JEL Classification

E62 E43 F33 F41 
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I thank Giancarlo Corsetti, Brad DeLong, Jeffrey Frankel, Ethan Ilzetzki, Daniel Leigh, Felix Reichling, Carlos Vegh and the editor Garett Jones, for very helpful comments.


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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Menzie Chinn
    • 1
  1. 1.