Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94219
Authors: 
Hughes Hallett, Andrew
Rannenberg, Ansgar
Schreiber, Sven
Year of Publication: 
2014
Series/Report no.: 
Discussion Paper, School of Business & Economics: Economics 2014/6
Abstract: 
Cogan et al. (2009, 2010) claim that the stimulus package passed by the United States Congress in February 2009 had a multiplier far below one. However, the stimulus’ multiplier strongly depends on the assumed monetary policy response. Based on official statements from the Fed chairman, the economic outlook, past behavior of the FOMC, optimal policy considerations, and financial market expectations, we find that in February 2009 a period of monetary accommodation of three years would have been a reasonable prediction. This implies that an appropriate real time assessment of the stimulus’ effects would have been more optimistic than Cogan et al.’s.
Subjects: 
Obama fiscal stimulus
fiscal multiplier
interest rate forecasts
JEL: 
E58
E62
E37
E47
Document Type: 
Working Paper

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