Ten Years After the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?

Valerie Ramey

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: This paper takes stock of what we have learned from the “Renaissance” in fiscal research in the ten years since the financial crisis. I first discuss the new innovations in methodology and various strengths and weaknesses of the main approaches to estimating fiscal multipliers. Reviewing the estimates, I come to the surprising conclusion that the bulk of the estimates for average spending and tax change multipliers lie in a fairly narrow range, 0.6 to 1 for spending multipliers and -2 to -3 for tax change multipliers. However, I identify economic circumstances in which multipliers lie outside those ranges. Finally, I review the debate on whether multipliers were higher for the 2009 Obama stimulus spending in the United States or for fiscal consolidations in Europe.

Keywords: Economics (search for similar items in EconPapers)
Date: 2019-05-01
New Economics Papers: this item is included in nep-hpe and nep-mac
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Citations: View citations in EconPapers (248)

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Journal Article: Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research? (2019)
Working Paper: Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research? (2019)
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