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This note * addresses the following issues: • What are fiscal multipliers? • Why are multipliers important for macroeconomic projections and policy design? • What do we know about the size and persistence of multipliers? • What are the determinants of multipliers? • In countries where data availability limits the scope for empirical research, how to come up with multiplier estimates? • How to incorporate multipliers in macroeconomic projections? 1 This note refers to multipliers as one-year multipliers unless otherwise stated. In addition, all the following terms are synonyms: (exogenous) fiscal shock, fiscal impulse, and discretionary change in fiscal policy.

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Fiscal multipliers are important tools for macroeconomic projections and policy design. In many countries, little is known about the size of multipliers, as data availability limits the scope for empirical research. For these countries, we propose a simple method-dubbed the "bucket approach"-to come up with reasonable multiplier estimates. The approach bunches countries into groups (or "buckets") with similar multiplier values, based on their characteristics. It also takes into account the effect of some temporary factors, such as the state of the business cycle.