Fiscal multipliers in Brazil: between consensus and dissent

Abstract

This study aims to comprehensively analyze the Brazilian empirical literature on fiscal multipliers. Its contribution is associated with the systematization of the literature, highlighting the points of convergence and divergence that can, on the one hand, guide the formulation of fiscal policy and, on the other, point the way to a future research agenda. The methodology used and the heterogeneity of the multipliers at different stages of the economic cycle show important disagreements. However, consensus states the positive impact of government spending on income and economic growth. Finally, when evaluating multipliers by ‘type of spending,’ various studies indicate that the multipliers for public investment and social spending are higher and have more persistent effects over time.