This working paper is part of the UCL Institute for Innovation and Public Purpose’s (UCL IIPP) publication series.
Explore more working papers and policy reports here.
UCL Institute for Innovation and Public Purpose (IIPP) Working Paper Series: IIPP WP 2019-08
Authors
- Matteo Deleidi | Research Fellow, Roma Tre University; Honorary Research Fellow, UCL Institute for Innovation and Public Purpose
- Francesca Iafrate | Research Fellow, Roma Tre University
- Enrico Sergio Levrero | Associate Professor, Roma Tre University
Reference
Deleidi, M., Iafrate, F. and Levrero, E. S. (2019). Public investment fiscal multipliers: An empirical assessment for European countries. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP 2019-08). Available at: https://www.ucl.ac.uk/bartlett/publicpurpose/wp2019-08
Abstract
This paper aims to estimate fiscal multipliers in 11 Eurozone countries. To do this, we make use of yearly data provided by the OECD for the 1970-2016 period. By using the local projections approach on a panel dataset and considering different model specifications, we estimate the magnitude assumed by fiscal multipliers in order to assess whether an increase in government investment generates a ‘Keynesian effect’ on the level of the GDP. Our findings suggest that fiscal multipliers tend to be larger than one and an increase in public investment produces a permanent and persistent effect on the level of output. Additional model specifications suggest that government investment fiscal multipliers are lower when the post-crisis period is excluded by our sample and are larger in Southern countries than Northern ones.
This working paper is part of the UCL Institute for Innovation and Public Purpose’s (UCL IIPP) publication series.
Explore more working papers and policy reports here.