This paper estimates government purchase multipliers for a large number of OECD countries, allowing these multipliers to vary smoothly according to the state of the economy and using real-time forecast data to purge policy innovations of their predictable components. The authors adapt their previous methodology to use direct projections rather than the SVAR approach to estimate multipliers, to economize on degrees of freedom and to relax the assumptions on impulse response functions imposed by the SVAR method. Their findings confirm those of their earlier paper. In particular, GDP multipliers of government purchases are larger in recession, and controlling for real-time predictions of government purchases tends to increase the estimated multipliers of government purchases in recession. They also consider the responses of other key macroeconomic variables and find that these responses generally vary over the cycle, in a pattern consistent with the varying impact on GDP. The authors use a smooth transition vector autoregression (STVAR) model to estimate the effects of fiscal policies that can vary over the business cycle. They find that government spending shocks have a larger impact on output in recessions than in expansions. They also find that responses of other key macroeconomic variables vary over the cycle, consistent with the varying impact on GDP. The authors use OECD data to estimate these multipliers for a large number of countries, allowing for state dependence and controlling for information provided by predictions. They find that the size of the multipliers is larger in recessions and that controlling for real-time predictions of government purchases tends to increase the estimated multipliers in recessions. The authors also find that the size of the fiscal multiplier is influenced by factors such as government debt, openness to trade, and labor market regulations. They find that large government debt reduces the response of output to government spending shocks, while closed economies tend to have larger multipliers than open economies. They also find that more rigid labor markets can result in enhanced effectiveness of government spending shocks to stimulate output during a downturn. Overall, the results suggest that fiscal policy activism may indeed be effective at stimulating output during a deep recession, and that the potential negative side effects of fiscal stimulus, such as increased inflation, are also less likely under these circumstances. These empirical results call into question the results from the new Keynesian literature, which suggests that shocks to government spending, even when increasing output, will crowd out private economic activity.This paper estimates government purchase multipliers for a large number of OECD countries, allowing these multipliers to vary smoothly according to the state of the economy and using real-time forecast data to purge policy innovations of their predictable components. The authors adapt their previous methodology to use direct projections rather than the SVAR approach to estimate multipliers, to economize on degrees of freedom and to relax the assumptions on impulse response functions imposed by the SVAR method. Their findings confirm those of their earlier paper. In particular, GDP multipliers of government purchases are larger in recession, and controlling for real-time predictions of government purchases tends to increase the estimated multipliers of government purchases in recession. They also consider the responses of other key macroeconomic variables and find that these responses generally vary over the cycle, in a pattern consistent with the varying impact on GDP. The authors use a smooth transition vector autoregression (STVAR) model to estimate the effects of fiscal policies that can vary over the business cycle. They find that government spending shocks have a larger impact on output in recessions than in expansions. They also find that responses of other key macroeconomic variables vary over the cycle, consistent with the varying impact on GDP. The authors use OECD data to estimate these multipliers for a large number of countries, allowing for state dependence and controlling for information provided by predictions. They find that the size of the multipliers is larger in recessions and that controlling for real-time predictions of government purchases tends to increase the estimated multipliers in recessions. The authors also find that the size of the fiscal multiplier is influenced by factors such as government debt, openness to trade, and labor market regulations. They find that large government debt reduces the response of output to government spending shocks, while closed economies tend to have larger multipliers than open economies. They also find that more rigid labor markets can result in enhanced effectiveness of government spending shocks to stimulate output during a downturn. Overall, the results suggest that fiscal policy activism may indeed be effective at stimulating output during a deep recession, and that the potential negative side effects of fiscal stimulus, such as increased inflation, are also less likely under these circumstances. These empirical results call into question the results from the new Keynesian literature, which suggests that shocks to government spending, even when increasing output, will crowd out private economic activity.