Fiscal multiplier theory posits that as long as a country's overall MPC is greater than zero, then an initial infusion of government spending should lead to a disproportionately larger increase in ...

One approach to these questions would be to use historical data to measure the government spending multiplier (Barro, 1981; Alesina and Ardagna, 2009; Barro and Redlick, 2009; Mountford and Uhlig ...

If the multiplier is below one, the government spending crowds out the private sector, hence reducing it all. Economic textbooks traditionally claim that the government multiplier is high.

A multiplier of 2x, for instance, would double the base figure. A multiplier of 0.5x, on the other hand, would actually reduce the base figure by half. Many different multipliers exist in finance ...

Government Spending: The Zero Multiplier Model. Feb. 24, 2010 1:39 AM ET 3 Comments. Casey Mulligan. ... Government spending is not a perfect substitute for consumer spending, at all.

Some economists theorize that the crowding-out effect negates the multiplier effect induced by government stimulus spending. Learn more about how this happens.

For example, if the expenditure multiplier is 1.5, then every dollar of new government spending generates $1.50 of new GDP. How is it possible for a $1 change in government spending to translate ...

The origins of the fiscal multiplier can be traced to economist John Maynard Keynes’s prescription to tackle the Great Depression of the 1930s — he advocated massive government spending. Story ...

Now we have the extreme demand-side view that the so-called "multiplier" effect of government spending on economic output is greater than one -- Team Obama is reportedly using a number around 1.5.

Particularly egregious is something labeled "the balanced budget multiplier." To wit, an equal increase in government expenditures and taxes leads to an increase in national output equal to the ...

Fiscal multiplier theory posits that as long as a country's overall MPC is greater than zero, then an initial infusion of government spending should lead to a disproportionately larger increase in ...