Impacts of Government Spending Changes on Local Economies

Santiago Pinto () and Sonya Ravindranath Waddell

Richmond Fed Economic Brief, 2025, vol. 25, issue 28

Abstract: Local multipliers measure how an economic shock in a specific region (such as a change in federal government spending in that region) affects the local economy. Based on our survey of studies, a reasonable estimate range for local fiscal multipliers is: An income multiplier of 1.3-2.0, or an additional $1 of government spending increasing local GDP by 1.3 to 2.0 times. An employment multiplier of 10-30 jobs in the local economy for every additional $1 million in government spending (or $33,000 to $100,000 per job).

Keywords: Economic Growth; Fiscal Policy; employment and labor markets (search for similar items in EconPapers)
Date: 2025
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