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Biases in fiscal multiplier estimates

Zareh Asatryan,Annika Havlik,F. Heinemann,Justus Nover

Published 2020 in European Journal of Political Economy

ABSTRACT

The "true" size of fiscal multipliers is widely debated by economists and policy makers as large (small) multipliers provide arguments to expand (cut) public spending. Within a meta-analytical framework, we ask whether the large observed variance in multiplier estimates can be explained by the national imprint and various author incentives. For this purpose, we use data on economists' personal characteristics including results from a selfconducted author survey. Our evidence is consistent with the hypotheses that the national background of researchers and the interests of donors financing the research matter for the degree and direction of multiplier estimates. These potential biases largely disappear for teams of international co-authors.

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