How large is the local fiscal multiplier? Evidence from Chinese counties

Qingwang, Guo; Liu, Chang; Ma, Guonan

doi:10.1016/j.jce.2015.06.002

Cited by 31 publications

(15 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Similar to our findings, Jeong, Kang, and Kim () and Wang and Wen () show China’s fiscal multiplier is greater than unity, based on structural VAR models using recursive identification strategy. Guo, Liu, and Ma () find a smaller fiscal multiplier (around 0.6) using annual data from China’s prefectures, while Shi and Fukushige () show fiscal multipliers of autonomous prefectures in China ranging from 0.61 to 4.93. Our estimated fiscal multiplier is within the range documented in the literature.…”

Section: Introductionmentioning

confidence: 99%

China’s Fiscal Multiplier and Its State Dependence

Zhang

Zheng

et al. 2018

The Manchester School

View full text Add to dashboard Cite

This paper studies the effects of government spending on China’s output with a threshold structural vector autoregressive model. The empirical findings suggest that increasing government expenditure significantly raises China’s aggregate output. Contrary to the evidence of countercyclical fiscal multipliers in the advanced economies, China’s fiscal multiplier tends to be procyclical, suggesting a novel fiscal policy transmission mechanism in China.

show abstract

Section: Introductionmentioning

confidence: 99%

China’s Fiscal Multiplier and Its State Dependence

Zhang

Zheng

et al. 2018

The Manchester School

View full text Add to dashboard Cite

show abstract

“…Therefore, following the suggestions by Cameron and Miller (2015), we also use the wild cluster bootstrap to test the statistical significance of regression coefficients. 19 Based on the bootstrap, we can reject the null hypothesis that γ P + γ S = 0 with a p-value of 0.010 and the null hypothesis that γ P = 0 with a p-value of 0.040.…”

Section: First-stage Regressionsmentioning

confidence: 90%

“…For example, the Bureau of Economic Analysis does not publish data on net exports and business investment at the state level. In the literature on the LFM in the U.S., data for state-level government spending are often taken from the U.S. Census Bureau.3 Our approach is similar to Kraay (2012) andGuo et al (2016), who use variations in the funds loaned or transferred from an organization other than the local government for identification. Kraay (2012) estimates the fiscal multiplier in developing countries with the instrument of World Bank lending Guo et al (2016).…”

mentioning

confidence: 99%

Decomposing Local Fiscal Multipliers: Evidence from Japan

2019

View full text Add to dashboard Cite

Recent studies on fiscal policy use cross-sectional data and estimate local fiscal multipliers along with spillovers. This paper estimates local fiscal multipliers with spillovers using Japanese prefectural data comparable with the national accounts. We estimate the local fiscal multiplier on output to be 1.7 at the regional level. The regional fiscal multiplier consists of the prefecture-specific components and a component common across prefectures within the same region, which we interpret as the region-wide effect. Converting the latter component into the spillover, we find that the spillover is positive and small in size. We decompose the regional fiscal multiplier on output into multipliers on expenditure components. The regional fiscal multiplier on absorption exceeds 2.0 because of the crowding-in effect on consumption and investment. Moreover, we find that the spillover to absorption is considerable in contrast to the spillover to output.

show abstract

“…In a similar vein, Dillon et al (2011) employed an instrumental variable approach to estimate the impact of public investments on land values, household consumption and agricultural income in Nepal. A recent study by Guo et al (2016) measured the effect of local public spending on in-county investment and consumption across 1,800 counties in China. Focusing on government subsidies and investments in the agriculture sector, assessed the impact of government spending on agricultural growth and poverty reduction in rural India.…”

Section: Aida Investment and Policy Analysismentioning

confidence: 99%

The (Arab) Agricultural Investment for Development Analyzer (AIDA): An innovative tool for evidence-based planning

Raouf¹,

Kassim²,

Wiebelt³

et al. 2018

View full text Add to dashboard Cite

This paper describes an innovative agricultural and rural economic planning tool that will help governments and analysts in the design of agricultural investment plans: the (Arab) Agricultural Investment for Development Analyzer (AIDA). A policy challenge for all governments, including those in the Middle East and North Africa, is determining the appropriate allocation and quality of public spending to foster agricultural and rural economic growth, employment creation, and poverty reduction. The AIDA economic planning toolkit has been built using an economy-wide and minimalistic investment data approach to assist governments in meeting this planning challenge. Centered on the use of economy-wide Computable General Equilibrium (CGE) models, it allows for a comprehensive planning approach to ensure that the level and allocation of investment in the agriculture and rural sectors is sufficient for achieving desired targeted outcomes. It does this by linking agricultural and rural spending to economic growth, job creation, and household poverty, given resource and market constraints, as well as considering trade-offs and opportunity costs associated with different investment options. Such a holistic system approach enables the ranking of possible interventions and allocations of public funds amid possible changes in public policy to help in designing national agriculture plans and targets.

show abstract

How large is the local fiscal multiplier? Evidence from Chinese counties

Cited by 31 publications

References 10 publications

China’s Fiscal Multiplier and Its State Dependence

China’s Fiscal Multiplier and Its State Dependence

Decomposing Local Fiscal Multipliers: Evidence from Japan

The (Arab) Agricultural Investment for Development Analyzer (AIDA): An innovative tool for evidence-based planning

Contact Info

Product

Resources

About