Pascal Michaillat and Emmanuel Saez, (2019), “How to design a stimulus package”, VoxEU, 13 May
Academics and policymakers alike have debated how to structure an optimal stimulus package since the Great Recession. This column revisits the arguments related to the size of the multiplier and the usefulness of public spending, and offers a blueprint for future stimulus packages. It finds that the relationship between the multiplier and stimulus spending is hump-shaped, and that a well-designed stimulus package should depend on the usefulness of public expenditure. The output multiplier is not a robust statistic to use, and instead the ‘unemployment multiplier’ should be used.
Relevant Posts
- Thomas Blanchet, Lucan Chancel and Amory Gethin, (2019), «Forty years of inequality in Europe: Evidence from distributional national accounts», VoxEU, 22 April
- Ines Goncalves Raposo, (2019), » Secular stagnation and the future of economic stabilisation», Bruegel, 1 April