IMF Working Papers

Fiscal Multipliers in Mongolia

By Tigran Poghosyan

May 23, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Tigran Poghosyan. "Fiscal Multipliers in Mongolia", IMF Working Papers 2025, 101 (2025), accessed May 30, 2025, https://doi.org/10.5089/9798229008846.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Fiscal policy plays an important macroeconomic role in Mongolia. On the one hand, fiscal expansion is seen as a measure to boost aggregate demand. On the other hand, import leakages mitigate the impact of fiscal expansion on growth. Applying a structural vector autoregressive model, this paper finds that Mongolia’s total spending and revenue multipliers are below 1, peaking at 0.3 and -0.1, respectively. The lower than 1 multiplier can be explained by import leakages in Mongolia. Capital spending multiplier peaks at 0.6, exceeds and remains more persistent than the current spending multiplier, suggesting that public investment is more efficient in boosting growth than current spending. Tax revenue and non-tax revenue multipliers peak at -0.1 and -0.2, respectively, and are short-lived. Revenue multipliers are broadly comparable in size, but their assessment is challenging due to lack of sizeable tax policy measures in Mongolia.

Subject: Capital spending, Current spending, Econometric analysis, Expenditure, Fiscal multipliers, Fiscal policy, Public debt, Public investment spending, Revenue administration, Structural vector autoregression, Total expenditures

Keywords: Asia, Automatic stabilizers, Bank of Mongolia, Capital spending, Current spending, Europe, Fiscal multipliers, Fiscal Multipliers, Imports, Mongolia, Public investment spending, Structural VAR, Structural vector autoregression, Total expenditures

Publication Details

You May Also Be Interested In...

New Zealand: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand

May 26, 2025

Impact of International Shocks on North Macedonia and the Western Balkans: Republic of North Macedonia

May 23, 2025

Libya: Technical Assistance Report-Workshop on Tax Administration Digitalization in Fragile and Conflict-Affected States

May 23, 2025

Long and Short-term Impact of Tourism on Growth in Small Developing States

May 23, 2025