Will the Stimulus Work? Reasons to Doubt the Romer-Bernstein Spending Multiplier Estimates
March 31, 2009 at 03:03 AM EDT
US economic advisers called for aggressive fiscal stimulus, and some support further measures. But many macroeconomists are not so sure. This column analyses fiscal stimulus using a New Keynesian model that exemplifies contemporary academic thinking on the subject. It says that the spending multiplier is much lower than the Obama administration’s estimates – government spending [...]
