Multiplier of spending cuts bigger than fiscal expansions, paper argues

Federal Reserve Bank of Richmond
Federal Reserve Bank of Richmond

The multiplier effect of public spending cuts is bigger than that of government stimulus, a paper released by the Federal Reserve Bank of Richmond says, and austerity seems to reach its most effective phase during a recession.

Are the effects of fiscal policy asymmetric? by Regis Barnichon, Christian Matthes and David Price, argues that the impact of fiscal shocks vary with the direction of the fiscal action and stage of the economic cycle.

The research finds cuts in government spending record

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