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Why hasn't the fading fiscal drag boosted GDP growth?

With the best will in the world towards the anti-austerians, the bigger fiscal squeeze in 2013 had amuch smaller impact on the economy's performance than many feared, while the more recentfading of the fiscal drag hasn't triggered the expected pick-up in GDP growth in 2014 and 2015either. The IMF infamously claimed in late 2012 that the fiscal multiplier for developed countriesmight be between 0.9 and 1.7. In contrast, our calculations indicate that over the past few yearsthe multiplier in the US has been below 0.5.

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