Fiscal policy shocks amplified by accommodative monetary policy – paper
IMF research analyses impact of government spending spillovers on economic activity
Fiscal spillovers are “significant” in the presence of slack in the economy or accommodative monetary policy, according to research from the International Monetary Fund.
In a research note that examines the cross-border impact of fiscal policy on economic activity, authors Patrick Blagrave, Giang Ho, Ksenia Koloskova and Esteban Vesperoni assess government spending and tax revenue shocks from five advanced economies on 55 other nations.
“Economic slack and policy constraints can lead to large
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