Can Government Purchases Stimulate the Economy?¶
Ramey. (2011). Can Government Purchases Stimulate the Economy?. Journal of Economic Literature.
Cited by¶
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Domain-specific¶
- Fiscal Multiplier
- Once each round also leaks to taxes and imports, and forward-looking households trim spending in anticipation of future taxes, the effective per-round retention falls well below 0.8 and the realized net multiplier is far smaller — often near or below 1.5
This sourceRamey's survey of theory, aggregate US and cross-locality estimates, concluding that the multiplier for a temporary deficit-financed increase in government purchases is probably between 0.8 and 1.5.
- Once each round also leaks to taxes and imports, and forward-looking households trim spending in anticipation of future taxes, the effective per-round retention falls well below 0.8 and the realized net multiplier is far smaller — often near or below 1.5
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