TY  - JOUR
AU  - Favero,Carlo
AU  - Giavazzi,Francesco
AU  - Perego,Jacopo
TI  - Country Heterogeneity and the International Evidence on the Effects of Fiscal Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17272
PY  - 2011
Y2  - August 2011
UR  - http://www.nber.org/papers/w17272
L1  - http://www.nber.org/papers/w17272.pdf
N1  - Author contact info:
Carlo Favero
Department of Finance
Bocconi University and IGIER
Via Röntgen, 1
20136 Milano, ITALY
E-Mail: carlo.favero@unibocconi.it

Francesco Giavazzi
Universita' Bocconi and IGIER
Via Guglielmo Rontgen, 1
Milan 20136
ITALY
Tel: 0039-02-5836-3304
Fax: 0039-02-5836-3302
E-Mail: francesco.giavazzi@unibocconi.it

Jacopo Perego
IGIER Universita' Bocconi
1 via Roentgen
20136 Milano
Italy
E-Mail: jacopo.perego@unibocconi.it
AB  - This paper shows how the richer frequency and variety of fiscal policy shocks available in an international sample can be analyzed recognizing the heterogeneity that exists across different countries. The main conclusion of our empirical analysis is that the question "what is the fiscal policy multiplier"  is an ill-posed one. There is no unconditional fiscal policy multiplier. The effect of fiscal policy on output is different depending on the different debt dynamics, the different degree of openness and the different fiscal reaction functions across different countries. There are many fiscal multipliers and an average fiscal multiplier is of very little use to describe the effect of exogenous shifts in fiscal policy on output.
ER  -