Slovenian paper examines government spending in a monetary union
Economists argue countries in a monetary union have limited range of stabilisation tools
Complementarities between government and private consumption can substantially increase spending multipliers, according to a working paper published today by the Bank of Slovenia.
Daragh Clancy, Pascal Jacquinot and Matija Lozej, find that, depending on the degree of complementarity between government and private consumption, government consumption expenditure can "have strong effects on private consumption and output".
In their paper, The effects of government spending in a small open economy
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