Local Fiscal Multipliers and Fiscal Spillovers in the United States

Alan Auerbach, Yuriy Gorodnichenko and Daniel Murphy ()

No 25457, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate local fiscal multipliers and spillovers for the United States using a rich dataset based on U.S. Department of Defense contracts and a variety of outcome variables relating to income and employment. We find strong positive spillovers across locations and industries. Both backward linkages and general equilibrium effects (e.g., income multipliers) contribute to the positive spillovers. Geographical spillovers appear to dissipate fairly quickly with distance. Our evidence points to the relevance of Keynesian-type models that feature excess capacity.

JEL-codes: E62 H5 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-mac and nep-ure
Note: EFG PE
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Citations: View citations in EconPapers (35)

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