Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161918
Authors: 
Bernardini, Marco
De Schryder, Selien
Peersman, Gert
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6479
Abstract: 
We use a novel quarterly dataset of U.S. states to examine the dynamics and determinants of relative government spending multipliers in the decade surrounding the Great Recession. We find average multipliers that are similar to those that have been reported for the decades preceding the crisis, but this masks substantial heterogeneity. First, average cumulative multipliers were around 2 in the impact quarter, but declined to less than 1 after one year. Second, implied relative multipliers ranged between 0 and more than 4 across states at particular points in time, as well as for the same state at different moments within the sample period depending on the individual state’s stance of the business cycle, household indebtedness and the interaction of both conditions. Finally, we provide evidence that, controlling for total expenditures, a mere redistribution of government spending across states did also had a significant influence on the aggregate U.S. economy due to cross-state heterogeneity of the effects.
Subjects: 
fiscal multiplier
household debt
Great Recession
regional redistribution
JEL: 
C23
E32
E44
E62
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.