Measuring the output responses to fiscal policy
By: Alan J. Auerbach, Yuriy Gorodnichenko
Contributors: Gorodnichenko, Yuriy; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16311; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16311.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "A key issue in current research and policy is the size of fiscal multipliers when the economy is in recession.  Using a variety of methods and data sources, we provide three insights.  First, using regime-switching models, we estimate effects of tax and spending policies that can vary over the business cycle; we find large differences in the size of fiscal multipliers in recessions and expansions with fiscal policy being considerably more effective in recessions than in expansions.  Second, we estimate multipliers for more disaggregate spending variables which behave differently in relation to aggregate fiscal policy shocks, with military spending having the largest multiplier.  Third, we show that controlling for predictable components of fiscal shocks tends to increase the size of the multipliers"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 10/28/2010.

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