Estimated Macroeconomic Effects of the U.S. Stimulus Bill

28 Pages Posted: 11 Mar 2010 Last revised: 20 May 2010

See all articles by Ray C. Fair

Ray C. Fair

Yale University - Cowles Foundation; Yale School of Management - International Center for Finance

Multiple version iconThere are 2 versions of this paper

Date Written: May 19, 2010

Abstract

This paper uses a multicountry macroeconometric model to estimate the macroeconomic effects of the U.S. stimulus bill passed in February 2009. The analysis has the advantage of taking into account many endogenous effects. Real U.S. output is estimated to be $554 billion larger when summed over the 12-year period 2009:1-2020:4 (0.29 percent of the total sum of output). The average number of jobs is 509 thousand larger (0.37 percent). There is some redistribution of output and employment away from 2012-2015. At the end of 2020 the federal government debt is larger by $637 billion in real terms (the debt/GDP ratio is larger by 3.19 percentage points), which may increase the risk of negative asset-market reactions.

Keywords: Stimulus effects, Government spending multipliers

JEL Classification: E17

Suggested Citation

Fair, Ray C., Estimated Macroeconomic Effects of the U.S. Stimulus Bill (May 19, 2010). Cowles Foundation Discussion Paper No. 1756, Available at SSRN: https://ssrn.com/abstract=1568104 or http://dx.doi.org/10.2139/ssrn.1568104

Ray C. Fair (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
83
Abstract Views
903
rank
320,386
PlumX Metrics