Evaluating the presence of state dependent fiscal multiplier in Brazil
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Universidade Federal de Minas Gerais
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Dissertação de mestrado
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Membros da banca
Resumo
This study uses local projection technique to investigate the size of the fiscal multiplier in
Brazil after allowing for the possibility of distinguished impacts depending on the state of the
economic activity. The analyses rely on the time series of central government expenditure
adjusted according to the methodology developed by Orair et al. (2016), which we extend
until 2019, to incorporate expenses that have not been properly placed in the government
account. The 1-year fiscal expenditure multiplier on the GDP is around 2 during states of
slackness and -2 in regular states, suggesting a crowding out effect in the last case. The
1-year fiscal expenditure multiplier on household consumption and investment is significant
and close to 0.8 in states of slackness being negative but not significant in regular states of
economic activity. The 1-year multiplier on industry and service value added are close to 1
in slackness, and not significant during regular states.
Abstract
Assunto
Política tributária, Brasil, Finanças públicas, Economia
Palavras-chave
Fiscal Policy, Government Spending, Business Cycles, Public Finance