TY  - JOUR
AU  - Blanchard,Olivier J.
AU  - Leigh,Daniel
TI  - Growth Forecast Errors and Fiscal Multipliers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18779
PY  - 2013
Y2  - February 2013
UR  - http://www.nber.org/papers/w18779
L1  - http://www.nber.org/papers/w18779.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu

Daniel Leigh
International Monetary Fund
Research Department
700 19th Street, NW
Rm. 10-700N
Washington, DC 20431
E-Mail: dleigh@imf.org
AB  - This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the early years of the crisis.
ER  -