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

Valerie Ramey

Journal of Economic Perspectives, 2019, vol. 33, issue 2, 89-114

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.

JEL-codes: E32 E43 E44 E62 G01 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/jep.33.2.89
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Citations: View citations in EconPapers (258)

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Working Paper: 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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