However, the deficit financed multiplier is higher than the balanced budget multiplier.

fiscal budget variability according to economic cycle, the concept

The question then becomes what sort of multiplier to apply to this number.

They had claimed that the multiplier was around 0.5.

The fiscal multiplier is the ratio in which the change in a nation's income level is affected by government spending.

Furthermore, the average fiscal multiplier can vary depending on the composition of the fiscal structural adjustments.

By contrast, the fiscal multiplier was seriously underestimated – as the WEO has now recognized.

2.3 billion euros will come from a rise in social security contributions and payroll taxes with a fiscal multiplier of unity.

Therefore, if you apply the fiscal multiplier, an offset of those losses is expected over time.

The weakness of the spillover effects can be explained simply by the moderate value of Germany’s fiscal multiplier [2].

The first is that most standard fiscal multipliers used in ordinary forecasting models, including the IMF’s own, is roughly 0.5.

If a reduction in public spending of €1 leads to a decrease of GDP of €1, then the multiplier is estimated at one.

These countries do not have their own monetary policies, and to the extent that fiscal consolidation reduces local inflation, real interest rates will rise, which increases the fiscal multiplier.

According to our calculations, the average fiscal multiplier associated with the different measures that increase personal income tax will be 0.7 in 2013.

Recent literature (since 2009) has taken an interest in the value of the fiscal multiplier in the short term in times of crisis .