The electoral fiscal multiplier
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Abstract
The paper argues that in electoral times, a competent and opportunistic government switches from wasteful spending (e.g. pork-barrel) to non-wasteful spending. The result is that a fiscal shock crowds-in private consumption and the multiplier is greater than unity, but only around elections. In non-electoral times, private consumption is crowded out and non-Keynesian results apply. The empirical analysis allows for state-dependence of the multiplier and confirms that in electoral quarters, the multiplier is larger than one. Conversely, in non-electoral quarters, the multiplier is not different from zero.
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Economic Analysis and Policy
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76
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© 2022 Economic Society of Australia, Queensland. Published by Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence (http://creativecommons.org/licenses/by-nc-nd/4.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, providing that the work is properly cited.
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Subject
Political science
Political economy and social change
Applied economics
Econometrics
Economic theory
Social Sciences
Economics
Business & Economics
Fiscal policy multiplier
Government consumption
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Carmignani, F, The electoral fiscal multiplier, Economic Analysis and Policy, 2022, 76, pp. 938-945