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Take the estimates of fiscal contraction 2009-13 from the IMF Fiscal Monitor in fall 2012 (Figure 13), and compare this with changes in real fixed investment over the same period (from Eurostat).
The Congressional Budget Office, the nonpartisan agency that makes its own estimates of fiscal trends, is expected to report on Wednesday that the deficit for 2003 will be at least $175 billion -- but that is without any allowance for Mr. Bush's $674 billion, 10-year tax plan or the costs of a possible war.
Overall, our findings are consistent with recent estimates of fiscal multipliers for total government spending [ 28], but extends these estimates in a novel way to evaluate alternative budgetary sectors, compare periods of non-recession and recession, identify the role of domestic absorption, and include both Europe and the United States.
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The report's authors admit their calculations are a "back-of-the-envelope estimate of fiscal contraction", but even if they are only half right it is an extraordinary amount of money and it highlights some of the challenges facing China's anti-corruption crusader-in-chief, President Xi Jinping.
The International Monetary Fund recently published estimates of the fiscal adjustments developed economies would need to make to restore fiscal stability over the decade ahead.
The estimated unemployment impact multipliers are broadly in line with existing estimates of GDP fiscal multipliers (for instance, the estimated 0.16 coefficient for government expenditure would imply a GDP fiscal multiplier of about 0.5 assuming a standard Okun coefficient of 0.3).
However, in contrast with previous case-study estimates of the fiscal multipliers associated with defence spending in the United States [ 3, 18, 19], we estimated negative fiscal multipliers for military spending in Europe.
But even in that lucky case, the C.B.O.'s quantitative estimates of the fiscal cliff's economic effects are not reliable until they fully incorporate economic incentives.
These aren't my estimates of the fiscal gap or what's needed to close it.
A multiplier below 1.5 means slow growth and a lower debt burden at year's end.Estimates of fiscal multipliers are all over the map.
This paper estimates the impact of fiscal consolidation on unemployment and job market flows across EU countries using a recent database of consolidation episodes built on the basis of a "narrative" approach (Devries et al., 2011).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com