Estimating Local Fiscal Multipliers

Juan Carlos Suárez Serrato and Philippe Wingender (pwingender@imf.org)

Working Papers from eSocialSciences

Abstract: This paper proposes a new source of cross-sectional variation that may identify causal impacts of Government spending on the economy. It uses the fact that a large number of federal spending programs depend on local population levels. Every ten years, the Census provides a count of local populations. Since a different method is used to estimate non-Census year populations, this change in methodology leads to variation in the allocation of billions of dollars in federal spending. The baseline results follow a treatment-effects framework where the effect of a Census Shock on federal spending, income, and employment growth by re-weighting the data based on an estimated propensity score that depends on lagged economic outcomes and observed economic shocks are estimated [Working Paper 22425]

Keywords: cross-sectional variation; Census; government spending; economy; American Recovery and Reinvestment Act (ARRA) (search for similar items in EconPapers)
Date: 2016-07
Note: Institutional Papers
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Citations: View citations in EconPapers (91)

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Working Paper: Estimating Local Fiscal Multipliers (2016)
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