We estimate the fiscal (spending) multiplier using quarterly U.S. data, 1986-2017. We define government spending shocks …

spending by $0.29. We translate the regional consumption responses to an aggregate fiscal multiplier using a multi-region, New … multiplier, a result that distinguishes our incomplete markets model from models with complete markets. The aggregate consumption … multiplier is 0.64, which implies an output multiplier higher than one. The aggregate consumption multiplier is larger than the …

We argue that the fiscal multiplier of government purchases is increasing in the spending shock, in contrast to what is … assumed in most of the literature. The fiscal multiplier is largest for large positive government spending shocks and smallest …