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What the Government Purchases Multiplier Actually Multiplied in the 2009 Stimulus Package
Cogan, John F. - 2010
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 …
Persistent link: https://www.econbiz.de/10013136548
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Macroeconomics and Household Heterogeneity
Krueger, Dirk - 2016
The goal of this chapter is to study how, and by how much, household income, wealth, and preference heterogeneity amplify and propagate a macroeconomic shock. We focus on the U.S. Great Recession of 2007-2009 and proceed in two steps. First, using data from the Panel Study of Income Dynamics, we...
Persistent link: https://www.econbiz.de/10012989141
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Understanding the Effects of Government Spending on Consumption
Galí, Jordi; Lopez-Salido, David; Vallés, Javier - 2021
Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how...
Persistent link: https://www.econbiz.de/10013246399
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The Extensive Margin, Sectoral Shares and International Business Cycles
Devereux, Michael B. - 2011
This paper documents some previously neglected features of sectoral shares at business cycle frequencies in OECD economies. In particular, we find that the nontraded sector share of output is as volatile as aggregate GDP, and that for most countries, the nontraded sector is distinctly...
Persistent link: https://www.econbiz.de/10013121594
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Can the Market Multiply and Divide? Non-Proportional Thinking in Financial Markets
Shue, Kelly - 2019
Nominal stock prices are arbitrary. Therefore, when evaluating how a piece of news should affect the price of a stock, rational investors should think in percentage rather than dollar terms. However, dollar price changes are ubiquitously reported and discussed. This may both cause and reflect a...
Persistent link: https://www.econbiz.de/10012872301
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Job Displacement Insurance and (the Lack of) Consumption-Smoothing
Gerard, François - 2019
matched employee-employer data from Brazil, we find that displaced workers eligible for both UI and SP increase consumption at …
Persistent link: https://www.econbiz.de/10012872310
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Unsticking the Flypaper Effect Using Distortionary Taxation
Vegh, Carlos A. - 2016
The flypaper effect is a widely-documented puzzle whereby the propensity of sub-national governmental units to spend out of unconditional transfers is higher than the propensity to spend out of private income. Building on previous insights in the literature that rationalize this puzzle using...
Persistent link: https://www.econbiz.de/10012989731
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Economics, History, and Causation
Morck, Randall - 2011
Economics and history both strive to understand causation: economics using instrumental variables econometrics and history by weighing the plausibility of alternative narratives. Instrumental variables can lose value with repeated use because of an econometric tragedy of the commons bias: each...
Persistent link: https://www.econbiz.de/10013131513
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In Search of the Multiplier for Federal Spending in the States During the Great Depression
Fishback, Price V. - 2010
If there was any time to expect a large peace-time multiplier effect from federal spending in the states, it would have …. Using panel data methods we estimate a multiplier, defined as the change in per capita state economic activity in response … to an additional dollar per capita of federal funds. The state per capita personal income multiplier with respect to per …
Persistent link: https://www.econbiz.de/10013135808
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De Facto Fiscal Space and Fiscal Stimulus : Definition and Assessment
Aizenman, Joshua - 2010
We define the notion of a 'de facto fiscal space' of a country as the inverse of the tax-years it would take to repay the public debt. Specifically, we measure the outstanding public debt relative to the de facto tax base, where the latter measures the realized tax collection, averaged across...
Persistent link: https://www.econbiz.de/10013135878