Inside the IMF “mea culpa”: A panel analysis on growth forecast errors and Keynesian multipliers in Europe

Emiliano Brancaccio, Fabiana De Cristofaro



The tests carried out by Blanchard and Leigh (2013; IMF, 2012) and Fátas and Summers (2018) are extended here into a panel framework in order to assess the empirical basis of the so-called IMF “mea culpa” regarding the underestimation of Keynesian multipliers during the euro area crisis. The objections put forward by the European Central Bank, the European Commission and other authors against the “underestimation” thesis are tested and refuted. The results support the “mea culpa” and highlight that the underestimation of multipliers can concern both the short and the long term.


JEL codes:E23, E27, E62


GDP forecast errors, Keynesian multipliers, panel analysis

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