Or, are there nonlinearities in the real (macro) world?
Category Archives: multipliers
Fiscal stimulus
My colleague UCSD Professor Valerie Ramey has an interesting new paper looking at the effects of higher government spending on GDP.
I Killed Some Brain Cells Today
I ran a regression of ΔY on ΔX and ΔZ, over the 1967Q1-2011Q3 period. I found that the coefficient on ΔX was 0.007, and on ΔZ was -0.080. Neither coefficient was statistically significant at conventional levels, so I concluded that neither affected ΔY.
Has Austerity Brought a Boom in the UK?
Or Generalissimo Francisco Franco redux.
In “UK: Economic growth, double-dips and the PMI,” (G. Buckley, Deutsche Bank, Nov. 4, 2011, not online):
UK GDP grew by 0.5% qoq in Q3, but the position the economy is in is now officially worse than it was in the aftermath of the Great Depression. Add to this the weakening in the composite PMI
survey for October (particularly the manufacturing report), also published this week, and escalating risks for a sharper euro area recession, and the stage possibly looks set for a much bleaker
picture by the end of this year/start of 2012.
Shovel ready
Some infrastructure spending is more stimulative than others.
DSGEs, Detrending, and Forecasting
With some implications for the debate over assessing fiscal and monetary policies
Reader Brian writes:
DSGE’s aren’t the answer to everything, but I still find the microfoundations, careful treatment of expectations, etc. still attractive and, in my opinion, the best we have at the moment.
Assessing the Stimulus and Its Aftermath
Or, on reading those who can do math, and those who can’t (i.e., yet more from Heritage)
Multiplier estimates, across countries, across states, across time
Today’s two sessions — one in the NBER’s International Finance and Macro group and one in Monetary Economics — included papers that tackled multipliers from a variety of directions. The general results indicated to me that, while multipliers are sometimes below unity, for conditions prevailing in the United States in 2011, they are typically above.
Guest Contribution: The Fiscal Stimulus in 2009-11
Trade Openness, Fiscal Space and Exchange Rate Adjustment
Today, we are fortunate to have as guest contributors Joshua Aizenman of UC Santa Cruz and Yothin Jinjarak of the School of Oriental and African Studies of London University.
This post draws upon Aizenman and Jinjarak (2011).
Crowding Out Watch, Updated
I’m teaching the concept of portfolio crowding out in my intermediate macro course (handout with algebra here) now, and as I was going through the notes, I observed that last I had checked, there was (still!) little evidence of crowding out. Here’s the graph, updated with data through 2/25 (that is, pretty much the same story as last time I discussed this, despite the hysterics).