Estimated Macroeconomic Effects of the U.S. Stimulus Bill

Ray Fair ()

No 1756, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: This paper uses a multicountry macroeconometric model to estimate the macroeconomic effects of the U.S. stimulus bill passed in February 2009. The analysis has the advantage of taking into account many endogenous effects. Real U.S. output is estimated to be $554 billion larger when summed over the 12-year period 2009:1-2020:4 (0.29 percent of the total sum of output). The average number of jobs is 509 thousand larger (0.37 percent). There is some redistribution of output and employment away from 2012-2015. At the end of 2020 the federal government debt is larger by $637 billion in real terms (the debt/GDP ratio is larger by 3.19 percentage points), which may increase the risk of negative asset-market reactions.

Keywords: Stimulus effects; Government spending multipliers (search for similar items in EconPapers)
JEL-codes: E17 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-03
New Economics Papers: this item is included in nep-bec and nep-mac
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Citations: View citations in EconPapers (5)

Published in Contemporary Economic Policy (October 2010), 439-452

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Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:1756

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