Do government policy multipliers decrease with inflation?

We use cross-country data to examine the effects of inflation on government spending and monetary policy multipliers. In contrast to earlier work by Ball, Mankiw, and Romer (1988) and Defina (1991), we allow for differential impacts of both the monetary base and government spending, and this difference turns out to be empirically quite important. We find little evidence in favor of a New Keynesian, sticky price model.