Afternoon Must-Read: Daniel Riera-Crichton et al.: Procyclical and Countercyclical Fiscal Multipliers

Daniel Riera-Crichton et al.: Procyclical and Countercyclical Fiscal Multipliers: Evidence from OECD Countries: “It is not always the case that government spending…

…is going up in recessions…. The ‘true’ long-run multiplier for bad times (and government spending going up) turns out to be 2.3 compared to 1.3 if we just distinguish between recession and expansion. In extreme recessions, the long-run multiplier reaches 3.1.”