Fiscal policy composition, multipliers and public debt sustainability: Evidence from OECD countries

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, November 28, 2023: Matteo Deleidi from Università degli studi di Bari Aldo Moro will present the paper “Fiscal policy composition, multipliers and public debt sustainability: Evidence from OECD countries ".

Abstract:

This paper aims to quantify the effects of government expenditure and its components, i.e. government consumption and investment, on output and public debt sustainability. The Local Projections approach is applied to a dataset of 14 OECD countries considered for the 1981-2017 period. Fiscal policy shocks have been identified using the Blanchard and Perotti strategy and the narrative approach based on fiscal consolidation episodes. Multipliers of total government spending are above the unit and government investment multipliers are higher than consumption ones. Although all fiscal policy shocks reduce the public debt-to-GDP ratio, government investment is the most effective tool for promoting public debt sustainability.

The Seminar will be held in Aula 5.

For online partecipation use this link.