Do government stimulus programs have different effects in recessions, or by type of tax or spending program?

John Heim

Empirical Economics, 2016, vol. 51, issue 4, No 3, 1333-1368

Abstract: Abstract This study tests 70 structural models of US GDP, consumption, and investment, differing in control variables, econometric method, or period tested. Deficit-financed government stimulus programs were found to crowd-out consumer and business spending in both recessions and nonrecessions, even in Keynesian models. Causes of crowd-out in recessions are identified. The type of tax cut or spending stimulus did not matter. Some VAR studies reach contrary conclusions. Methodological differences may explain why. Differences include how causal and spurious correlates are separated, how business cycle and stimulus effects are distinguished, and under what circumstances parameter estimates can be modified.

Keywords: Structural macroeconomic modeling; Endogeneity; Identification; Multicollinearity; Government deficits (search for similar items in EconPapers)
JEL-codes: C50 C51 E12 E21 E22 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-015-1050-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:51:y:2016:i:4:d:10.1007_s00181-015-1050-8

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-015-1050-8

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().