Excess Capacity and Heterogeneity in the Fiscal Multiplier: Evidence from the Obama Stimulus Package
Arindrajit Dube, Ethan Kaplan and Ben Zipperer ,
Working paper
August
2014
Abstract

We estimate local multipliers from the ARRA (Obama stimulus) bill using cross-county variation in expenditure. We use within-state variation, and include other demographic controls as well as a predicted employment control using an industry shift-share measure. We estimate a peak annualized employment multiplier of 1 job-year per $100K spent per county resident and a 2 year average multiplier of 0.75.

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