Fiscal Multipliers over the Growth Cycle : Evidence from Malaysia

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Rafiq, Sohrab
dc.contributor.author
Zeufack, Albert
dc.date.accessioned
2012-03-19T17:29:26Z
dc.date.available
2012-03-19T17:29:26Z
dc.date.issued
2012-03-01
dc.date.lastModified
2021-04-23T14:02:08Z
dc.description.abstract
This paper explores the stabilisation properties of fiscal policy in Malaysia using a model incorporating nonlinearities into the dynamic relationship between fiscal policy and real economic activity over the growth cycle. The paper also investigates how output multipliers for government purchases may alter for different components of government spending. The authors find that fiscal policy in Malaysia has become increasingly pro-cyclical over the last 25 years and establish that the size of fiscal multipliers tend to change over the growth cycle. A 1 Malaysian Ringgit rise in government (investment) spending leads to a maximum output multiplier of around 2.7 during growth recessions, and around 2 in normal times. The returns to government spending in Malaysia are greater when the focus is on public investment, as opposed to consumption. Changes in tax policy are less effective in stimulating economic activity than direct government spending. These results provide empirical backing to conjectures in the recent literature implying that procyclicality in fiscal policy reduces the effectiveness of fiscal actions in emerging markets.
en
dc.identifier
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120305092641
dc.identifier.uri
http://hdl.handle.net/10986/3268
dc.language
English
dc.relation.ispartofseries
Policy Research working paper ; no. WPS 5982
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
ACCELERATOR
dc.subject
ACCESS TO INFORMATION
dc.subject
AGENCY PROBLEM
dc.subject
AGGREGATE DEMAND
dc.subject
AGGREGATE SUPPLY
dc.subject
AUTOREGRESSION
dc.subject
BORROWER
dc.subject
BUSINESS CYCLE
dc.subject
BUSINESS CYCLES
dc.subject
CAPITAL CONSUMPTION
dc.subject
CAPITAL EXPENDITURE
dc.subject
CAPITAL FLOWS
dc.subject
CAPITAL TRANSFERS
dc.subject
CENTRAL BANK
dc.subject
COMPOSITION OF PUBLIC SPENDING
dc.subject
CONSUMERS
dc.subject
CONSUMPTION SPENDING
dc.subject
CONTINGENT LIABILITIES
dc.subject
CORPORATE INCOME
dc.subject
CORPORATE INCOME TAX
dc.subject
CREDIT CONSTRAINTS
dc.subject
CREDIT WORTHINESS
dc.subject
DEBT
dc.subject
DEMAND CURVE
dc.subject
DEVELOPING COUNTRIES
dc.subject
DEVELOPMENT POLICY
dc.subject
DIRECT GOVERNMENT SPENDING
dc.subject
DISPOSABLE INCOME
dc.subject
ECONOMIC ACTIVITY
dc.subject
ECONOMIC CYCLE
dc.subject
ECONOMIC DOWNTURN
dc.subject
ECONOMIC DOWNTURNS
dc.subject
ECONOMIC GROWTH
dc.subject
ECONOMIC OUTCOMES
dc.subject
ECONOMIC RECOVERY
dc.subject
ECONOMIC THEORY
dc.subject
ELASTICITY
dc.subject
EMERGING MARKET
dc.subject
EMERGING MARKET COUNTRIES
dc.subject
EMERGING MARKET ECONOMIES
dc.subject
EMERGING MARKETS
dc.subject
ENDOGENOUS VARIABLES
dc.subject
EXPECTED VALUES
dc.subject
EXPENDITURE
dc.subject
EXPENDITURES
dc.subject
FEDERAL RESERVE
dc.subject
FEDERAL RESERVE BANK
dc.subject
FISCAL ACTIONS
dc.subject
FISCAL DISCIPLINE
dc.subject
FISCAL POLICY
dc.subject
FORECAST HORIZON
dc.subject
FORECASTS
dc.subject
GDP
dc.subject
GENERAL EQUILIBRIUM
dc.subject
GOVERNMENT CONSUMPTION
dc.subject
GOVERNMENT EXPENDITURE
dc.subject
GOVERNMENT EXPENDITURES
dc.subject
GOVERNMENT INVESTMENT
dc.subject
GOVERNMENT POLICY
dc.subject
GOVERNMENT REVENUES
dc.subject
GOVERNMENT SPENDING
dc.subject
GROWTH MODELS
dc.subject
GROWTH RATE
dc.subject
HEALTH CARE
dc.subject
HOUSEHOLDS
dc.subject
INCOME TAX
dc.subject
INCOME TAXES
dc.subject
INFRASTRUCTURE PROJECTS
dc.subject
INTEREST RATE
dc.subject
INTEREST RATES
dc.subject
INTERNATIONAL BANK
dc.subject
INVESTMENT EXPENDITURES
dc.subject
INVESTMENT PROJECTS
dc.subject
INVESTMENT SPENDING
dc.subject
INVESTMENT STRATEGY
dc.subject
KEYNESIAN THEORY
dc.subject
LIQUIDITY
dc.subject
LONG-TERM INVESTMENT
dc.subject
MACROECONOMIC CONDITIONS
dc.subject
MACROECONOMIC POLICIES
dc.subject
MACROECONOMIC VARIABLES
dc.subject
MACROECONOMICS
dc.subject
MARGINAL PRODUCTIVITY
dc.subject
MINISTRY OF FINANCE
dc.subject
MONETARY ECONOMICS
dc.subject
MONETARY FUND
dc.subject
MONETARY POLICY
dc.subject
MULTIPLIERS
dc.subject
NEGATIVE SHOCK
dc.subject
NET WORTH
dc.subject
PERSONAL INCOME
dc.subject
PERSONAL INCOME TAXES
dc.subject
POLICY DECISIONS
dc.subject
POLITICAL ECONOMY
dc.subject
POVERTY REDUCTION
dc.subject
PRESENT VALUE
dc.subject
PRIVATE CONSUMPTION
dc.subject
PRIVATE INVESTMENT
dc.subject
PRIVATE SECTOR
dc.subject
PUBLIC
dc.subject
PUBLIC CAPITAL
dc.subject
PUBLIC CONSUMPTION
dc.subject
PUBLIC ECONOMICS
dc.subject
PUBLIC EXPENDITURE
dc.subject
PUBLIC EXPENDITURE REVIEW
dc.subject
PUBLIC INVESTMENT
dc.subject
PUBLIC SPENDING
dc.subject
RANDOM WALK
dc.subject
REAL ECONOMIC GROWTH
dc.subject
REAL EXCHANGE RATE
dc.subject
REAL GDP
dc.subject
RECESSION
dc.subject
RENT SEEKING
dc.subject
RETURNS
dc.subject
RETURNS TO CAPITAL
dc.subject
RISK SHARING
dc.subject
ROADS
dc.subject
SALES TAX
dc.subject
SAVINGS
dc.subject
SOCIAL SECURITY
dc.subject
SOCIAL SECURITY CONTRIBUTIONS
dc.subject
SUPPLY CURVE
dc.subject
TAX
dc.subject
TAX BASE
dc.subject
TAX CHANGES
dc.subject
TAX CUT
dc.subject
TAX CUTS
dc.subject
TAX PAYMENTS
dc.subject
TAX POLICY
dc.subject
TAX REVENUE
dc.subject
TAX REVENUES
dc.subject
TAX SHOCKS
dc.subject
TAXATION
dc.subject
TOTAL SPENDING
dc.subject
TRADE BALANCE
dc.subject
TRANSFER PAYMENTS
dc.subject
TREASURY
dc.subject
TREASURY BILL
dc.subject
TREASURY BILL RATE
dc.subject
UNCERTAINTY
dc.subject
VOTERS
dc.subject
WEALTH
dc.title
Fiscal Multipliers over the Growth Cycle : Evidence from Malaysia
en
okr.date.disclosure
2012-03-01
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120305092641
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-5982
okr.identifier.externaldocumentum
000158349_20120305092641
okr.identifier.internaldocumentum
15891163
okr.identifier.report
WPS5982
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/03/05/000158349_20120305092641/Rendered/PDF/WPS5982.pdf
en
okr.region.administrative
East Asia and Pacific
okr.region.administrative
East Asia and Pacific
okr.region.country
Malaysia
okr.region.geographical
Southeast Asia
okr.region.geographical
Asia
okr.topic
Public Sector Expenditure Policy
okr.unit
Development Research Group (DECRG)
okr.volume
1 of 1

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