scholarly journals The Government Spending Multiplier at the Zero Lower Bound: Evidence from the United States

2020 ◽  
Vol 82 (6) ◽  
pp. 1262-1294
Author(s):  
Mario Di Serio ◽  
Matteo Fragetta ◽  
Emanuel Gasteiger
Keyword(s):  
United States ◽  
Lower Bound ◽  
Government Spending ◽  
The United States ◽  
Zero Lower Bound ◽  
The Government

Honduras scandal may undermine Hernandez re-election

2016 ◽  
Keyword(s):  
United States ◽  
Government Spending ◽  
Public Life ◽  
The United States ◽  
Content Type ◽  
Political Actors ◽  
The Government ◽  
Run Up

Subject Outlook for the government of President Juan Orlando Hernandez. Significance On November 7, in a move that opposition figures claim is unconstitutional, President Juan Orlando Hernandez announced his intention to run for re-election in 2017. The announcement follows allegations relating to Hernandez's brother, that have highlighted links between senior figures in public life and a leading drug cartel. This risks undermining relations with the United States, and compounds controversy over the president's re-election bid. Impacts Hernandez may succeed in distancing himself from allegations of Cartel del Atlantico influence in public life. Presidential re-election may well be in the interests of a range of political actors. Increased government spending will drive higher growth in the run-up to next year's election.

FISCAL MULTIPLIERS AT THE ZERO LOWER BOUND: THE ROLE OF GOVERNMENT SPENDING PERSISTENCE

2019 ◽  
pp. 1-28 ◽  
Author(s):  
Phuong V. Ngo
Keyword(s):  
Lower Bound ◽  
Government Spending ◽  
New Keynesian ◽  
Zero Lower Bound ◽  
Role Of Government ◽  
Fiscal Multipliers ◽  
The Great Recession ◽  
Resource Cost ◽  
The Government

In this paper, I examine the role of government spending persistence on fiscal multipliers at the zero lower bound (ZLB) in a more realistic environment while keeping the model simple enough to identify mechanisms driving the result. In particular, I build on a standard dynamic New Keynesian (DNK) model with an occasionally binding ZLB and Rotemberg pricing with rebates, where the probability of hitting the ZLB and the government purchase shock are in line with US data. Moreover, I compute the multiplier in a state that mimics the Great Recession. The main findings of the paper are as follows: (1) the multiplier is non-monotonic in the persistence of government spending while the economy is at the ZLB; (2) given the persistence estimated from US data, the multiplier is 1.25; and (3) in the framework with perfect foresight or with aggregate resource cost for adjusting prices, the multiplier is around 1 or less.

Can Government Purchases Stimulate the Economy?

2011 ◽  
Vol 49 (3) ◽  
pp. 673-685 ◽  
Author(s):  
Valerie A Ramey
Keyword(s):  
United States ◽  
Government Spending ◽  
Theoretical Work ◽  
The United States ◽  
The State ◽  
Empirical Estimates ◽  
Government Purchases ◽  
The Government ◽  
Stimulus Package

This essay briefly reviews the state of knowledge about the government spending multiplier. Drawing on theoretical work, aggregate empirical estimates from the United States, as well as cross-locality estimates, I assess the likely range of multiplier values for the experiment most relevant to the stimulus package debate: a temporary, deficit-financed increase in government purchases. I conclude that the multiplier for this type of spending is probably between 0.8 and 1.5. (JEL E23, E62, H50)

Racial Unfairness and Fiscal Politics

2020 ◽  
pp. 1532673X2097210
Author(s):  
Katherine Krimmel ◽  
Kelly Rader
Keyword(s):  
United States ◽  
Government Spending ◽  
Racial Attitudes ◽  
The United States ◽  
Racial Groups ◽  
Prior Work ◽  
Government Programs ◽  
The Government ◽  
Using Data ◽  
Original Survey

We provide and test a theory explaining how and why racial attitudes shape public opinion on government spending in the United States. We hypothesize that many people think the government allocates money unfairly across racial groups, and “inequity aversion” leads them to reject spending as a result. Using data from an original survey, we find support for our theory in the sample as a whole, and within racial, partisan, and ideological subgroups. Indeed, unfairness views are comparable to partisanship in their relationship to opinion on spending. While prior work has shown that whites’ racial attitudes are correlated with opinion on specific government programs, we show they shape opinion about the appropriate level of government spending writ large. We also move beyond the study of white opinion, measuring views of unfairness in the distribution of spending among racial minorities as well.

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