Government spending at the zero lower bound (ZLB) is not necessarily welfare enhancing, even when its output multiplier …

canonical medium scale DSGE model. When monetary policy is characterized by a Taylor rule, the output multiplier (the change in … cycle, whereas the welfare multiplier (the consumption equivalent change in a measure of aggregate welfare for the same …. The welfare multiplier is still procyclical under passive monetary policy, albeit less so than under a Taylor rule …

falls significantly in response to an increase in government spending. These results imply that the average GDP multiplier … lies below unity. In order to determine whether concurrent increases in tax rates dampen the spending multiplier, I use two … spending multiplier. In the second part of the paper, I explore the effects of government spending on labor markets. I find …

government purchases multiplier. But equally crucial is the size of the government purchases multiplicand--the change in … government purchases of goods and services that the multiplier actually multiplies. Using new data from the Bureau of Economic … government purchases multiplier, changes in government purchases have had no material effect on the growth of GDP since the time …

Factor supply increases (depresses) output for many of the same reasons that the government spending multiplier might …" and suggest that the government spending multiplier is less than one, even during the recession …