Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned?t

摘要

A geographic cross-sectional fiscal spending multiplier measures the effect of an increase in spending in one region of a monetary union. Empirical studies of such multipliers have proliferated. 1 review this research and what the evidence implies for national multipliers. Based on an updated analysis of the ARRA and a survey of empirical studies, my preferred point estimate for a cross-sectional multiplier is 1.8. The paper also discusses conditions under which the cross-sectional multiplier provides a rough lower bound for the national, no-monetary-policy-response multiplier Putting these elements together, the cross-sectional evidence suggests a national no-monetary-policy-response multiplier of 1.7 or above.