Template-Type: ReDIF-Paper 1.0
Author-Name: Sergey Vlasov
Author-Email: VlasovSA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation 

Author-Name: Elena Deryugina
Author-Email: DeryuginaEB@cbr.ru

Author-Workplace-Name: Bank of Russia, Russian Federation


Title: Fiscal multipliers in Russia

Abstract: The paper covers the theoretical and practical issues related to estimating fiscal multipliers for the Russian economy. The analysis of the main determinants affecting the size of multipliers suggests a relatively low effect of changes in fiscal
variables on output growth. Estimation of the general government revenue and spending multipliers are generally in line
with these expectations as well as with the results available for emerging market economies and stands at the values of -
0.75 and 0.28 respectively. The negative direct impact on GDP growth from the medium-term fiscal consolidation is
estimated as relatively small (cumulatively about 0.3 percentage points through 2018-2020). Fiscal consolidation
scheduled for the medium-term is expected to have a negative impact on output. However, since it is intended to be
carried out mainly at the expense of the expenditure part of the budget, this should be less harmful to output growth and
could promote greater efficiency in public spending. The direct impact from a reduction in expenditures can be fully offset
by a significant positive indirect impact on GDP from an increase in confidence about long-term fiscal sustainability.

Length: 18 pages
Creation-Date: 2018-01
Revision-Date:
Publication-Status:
File-URL: http://cbr.ru/Content/Document/File/87582/wp28_e.pdf
File-Format: Application/pdf
File-Function:
Number:wps28
Classification-JEL:E62, H20, H50, O47
Keywords:fiscal multipliers, general government revenue, general government spending, Russia, Structural BVAR
Handle:RePEc:bkr:wpaper:wps28