Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/128363 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5665
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We estimate the fiscal multiplier associated with shocks to government spending. We consider increases in government spending in the U.S. states in the wake of natural disasters to capture spending shocks that are both unexpected and unrelated to the preceding state of the economy. We find that these have a powerful stimulating effect on the local economy, which is reflected in the value taken by the fiscal multiplier. This result is obtained when we identify fiscal shocks by the states’ own exposure to natural disasters, or when we use nearby states’ exposure to disasters instead.
Subjects: 
natural disasters
government spending
fiscal multiplier
U.S. states
JEL: 
E22
E62
H30
H50
H72
Document Type: 
Working Paper
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