Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned?

Gabriel Chodorow-Reich

American Economic Journal: Economic Policy, 2019, vol. 11, issue 2, 1-34

Abstract: A geographic cross-sectional fiscal spending multiplier measures the effect of an increase in spending in one region of a monetary union. Empirical studies of such multipliers have proliferated. I review this research and what the evidence implies for national multipliers. Based on an updated analysis of the ARRA and a survey of empirical studies, my preferred point estimate for a cross-sectional multiplier is 1.8. The paper also discusses conditions under which the cross-sectional multiplier provides a rough lower bound for the national, no-monetary-policy-response multiplier. Putting these elements together, the cross-sectional evidence suggests a national no-monetary-policy-response multiplier of 1.7 or above.

JEL-codes: E32 E52 E62 H54 H76 R53 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pol.20160465
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Citations: View citations in EconPapers (158)

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Working Paper: Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned? (2017)
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