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Government investment and fiscal stimulus

Christoph Boehm, (2019), “Government investment and fiscal stimulus”, VoxEU, 7 September

Fiscal stimulus packages typically feature large investment in infrastructure. The column argues that the fiscal multiplier associated with government investment during the Great Recession was near zero. Meanwhile, the government consumption multiplier was around 0.8. Estimates of the multiplier for total government purchases do not distinguish these two effects, which may affect their validity.

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