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 ...

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.

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 ...

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 ...

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.

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 ...

Focusing on government spending on private goods and services from 1980 to 2010, we find that the fiscal multiplier in France is significant and close to 1 on impact and becomes statistically ...

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 ...