Abstract

TORDIINSKY LANDAU, Matias. TOWARDS FISCAL COORDINATION IN SOUTH AMERICA: A PROPOSAL BASED ON INTER-COUNTRY FISCAL MULTIPLIERS. Cuad. Econ. [online]. 2020, vol.39, n.spe80, pp.471-497. ISSN 0121-4772.  https://doi.org/10.15446/cuad.econ.v39n80.82613.

Based on the methodology developed by Cingolani, Garbellini, and Wirkierman (2013) and the inter-country input-output (ICIO) tables published by the OECD, we estimate a matrix of multi-country income multipliers for five South American countries for the 2005-2015 period. We then devise a linear program to calculate the requirements of a coordinated fiscal expansion (where each country participates, although not in the same proportion) in order to achieve a target rate of growth for all countries in the region. This policy outperforms the implementation of isolated actions by each government, considering both their fiscal and external costs.

JEL: C61; C67; F14; F15; O41.

Keywords : Fiscal multipliers; South America; regional integration; input output.

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