Fiscal Stimulus and Consumer Debt

Review of Economics and Statistics ◽

10.1162/rest_a_00796 ◽

2019 ◽

Vol 101 (4) ◽

pp. 728-741 ◽

Cited By ~ 6

Author(s):

Yuliya Demyanyk ◽

Elena Loutskina ◽

Daniel Murphy

Keyword(s):

Adverse Effect ◽

Open Economy ◽

Department Of Defense ◽

Defense Spending ◽

Detailed Data ◽

Consumer Debt ◽

Short Term ◽

Fiscal Stimulus ◽

Fiscal Multiplier ◽

Economic Output

In the aftermath of the consumer debt–induced recession, policymakers have questioned whether fiscal stimulus is effective during periods of high consumer indebtedness. This study empirically investigates this question. Using detailed data on Department of Defense spending for the 2007–2009 period, we document that the open-economy relative fiscal multiplier is higher in geographies with higher consumer debt. The results suggest that in the short term (2007–2009), fiscal policy can mitigate the adverse effect of consumer (over)leverage on real economic output during a recession. We then exploit detailed microdata to show that both heterogeneous marginal propensities to consume and slack-driven economic mechanisms contribute to the debt-dependent multiplier.

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Fiscal Stimulus and Consumer Debt

SSRN Electronic Journal ◽

10.2139/ssrn.2819990 ◽

2017 ◽

Author(s):

Yuliya S. Demyanyk ◽

Elena Loutskina ◽

Daniel Patrick Murphy

Keyword(s):

Consumer Debt ◽

Fiscal Stimulus

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Erratum: Fiscal Stimulus and Consumer Debt

Review of Economics and Statistics ◽

10.1162/rest_e_01014 ◽

2021 ◽

Vol 103 (1) ◽

pp. 196-196

Author(s):

Yuliya Demyanyk ◽

Elena Loutskina ◽

Daniel Murphy

Keyword(s):

Consumer Debt ◽

Fiscal Stimulus

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Russia’s fiscal stimulus and fiscal sustainability

Voprosy Ekonomiki ◽

10.32609/0042-8736-2013-10-90-108 ◽

2013 ◽

pp. 90-108 ◽

Cited By ~ 2

Author(s):

N. Akindinova ◽

N. Kondrashov ◽

A. Cherniavsky

Keyword(s):

Government Spending ◽

Public Expenditure ◽

Oil Prices ◽

Fiscal Sustainability ◽

Macroeconomic Model ◽

Sharp Drop ◽

Fiscal Stimulus ◽

Fiscal Multipliers ◽

Russian Economy ◽

The Impact

This study examines the impact of public expenditure on economic growth in Russia. Fiscal multipliers for various items of government spending are calculated by means of our macroeconomic model of the Russian economy. Resources for fiscal stimulus and optimization are analyzed. In this study we assess Russia’s fiscal sustainability in conditions of various levels of oil prices. We conclude that fiscal stimulus is ineffective in Russia, while fiscal sustainability in conditions of a sharp drop in oil prices is relatively low.

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