Does the Size of the Government Consumption Multiplier for Finland Vary Over Time?

Abstract

This background paper provides new empirical evidence on the size of the Finnish fiscal policy multiplier for the period from 1975 to 2018. Using the tools of Bayesian time-varying parameters approach, I estimate a time-varying multiplier for government consumption for Finland. Based on the research results, it is not possible to conclude whether the government consumption multiplier has varied over time or not.