The literature on fiscal multipliers has evolved towards the notion that there is no such think asafiscal multiplier. These differ among many dimensions, including the aggregate state of theeconomy, wealth and income inequality, the demographic structure to name a few. However, in allof this studies, the elasticity of intertemporal substitution (Frisch) is held constant across countries.Based on findings from Peterman (2015), we use micro data to estimate country specific Frischelasticities and find that these differences not only are quantitatively meaningful in explaining cross-country differences in fiscal multipliers, but that the magnitude of the differences is much largerthan in most mechanisms that have been brought forward to explain cross-country heterogeneity infiscal multipliers
