Comments on: What If There is Little or No Multiplier? http://www.outsidethebeltway.com/archives/what_if_there_is_little_or_no_multiplier/ Online Journal of Politics and Foreign Affairs Tue, 24 Nov 2009 20:03:01 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: Alan Reynolds http://www.outsidethebeltway.com/archives/what_if_there_is_little_or_no_multiplier/comment-page-1/#comment-710813 Alan Reynolds Sun, 25 Jan 2009 16:20:32 +0000 http://www.outsidethebeltway.com/?p=30511#comment-710813 A broad IMF survey of the evidence on fiscal multipliers says they are "very small" -- no larger than unity (a dollar more G adds only a dollar to GDP)and sometimes negative (Denmark and Ireland slashed spending and their economies boomed). <strong>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=879624</strong> A broad IMF survey of the evidence on fiscal multipliers says they are "very small" -- no larger than unity (a dollar more G adds only a dollar to GDP)and sometimes negative (Denmark and Ireland slashed spending and their economies boomed).

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=879624

]]> By: Greg http://www.outsidethebeltway.com/archives/what_if_there_is_little_or_no_multiplier/comment-page-1/#comment-693924 Greg Sat, 24 Jan 2009 03:28:54 +0000 http://www.outsidethebeltway.com/?p=30511#comment-693924 We have never been able to "spend" our way out of a recession or a depression. Why is this situation so different? Between TARP and the Stimulus Pkg, we are talking about well over $1T. Barack Obama may be a needed change, but we we could do without flushing that kind of coin. We have never been able to "spend" our way out of a recession or a depression. Why is this situation so different? Between TARP and the Stimulus Pkg, we are talking about well over $1T.
Barack Obama may be a needed change, but we we could do without flushing that kind of coin.

]]> By: Dave Schuler http://www.outsidethebeltway.com/archives/what_if_there_is_little_or_no_multiplier/comment-page-1/#comment-691366 Dave Schuler Fri, 23 Jan 2009 22:36:48 +0000 http://www.outsidethebeltway.com/?p=30511#comment-691366 I certainly think that those who support a big stimulus package need to show their work. I've seen lots of assertions and very little proof. The prevailing wisdom appears to be that the Obama Administration is counting on a 1.5 multiplier. Why is that the right number? Why isn't the .8 that Robert Barro suggested recently closer to the mark? I think there's an even more pressing question: how long do they think the recession will last? Worst/best cases? We're in something like the 16th month of the recession now. If it goes on another 16 months that'll be the longest post-WWII recession by quite a bit and it takes us into mid-2010. How does spending that doesn't take place until 2011 help us with a recession that ended in 2010? I certainly think that those who support a big stimulus package need to show their work. I've seen lots of assertions and very little proof. The prevailing wisdom appears to be that the Obama Administration is counting on a 1.5 multiplier. Why is that the right number? Why isn't the .8 that Robert Barro suggested recently closer to the mark?

I think there's an even more pressing question: how long do they think the recession will last? Worst/best cases?

We're in something like the 16th month of the recession now. If it goes on another 16 months that'll be the longest post-WWII recession by quite a bit and it takes us into mid-2010. How does spending that doesn't take place until 2011 help us with a recession that ended in 2010?

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